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GRUPO FINANCIERO GALICIA S.A.

ANNUAL REPORT

17TH FISCAL YEAR: JANUARY 2015 / DECEMBER 2015

Grupo Financiero Galicia Annual Report Fiscal Year 2015 1

Grupo Financiero Galicia S.A.

Grupo Financiero Galicia S.A. (hereinafter “Grupo Financiero Galicia”) was constituted in 1999, as

a financial services holding company organized under the laws of Argentina. Its most important

asset is the 100% interest in Banco de Galicia y Buenos Aires S.A. (hereinafter “Banco Galicia” or

“the Bank”).

Founded in 1905, Banco Galicia is one of the largest private-sector banks in the Argentine financial

system, and one of the leading providers of financial services in the country. In its capacity as a

universal bank, and through affiliated companies and various distribution channels, Banco Galicia

offers a full spectrum of financial services to 9 million customers, both individuals and

corporations. Banco Galicia operates one of the most extensive and diversified distribution

networks among private-sector banks in Argentina, offering more than 425 points of contact with

customers, including traditional branches and e-banking facilities, together with other 297 service

centers that correspond to regional credit-card companies and 94 that belong to Compañía

Financiera Argentina S.A. (“Compañía Financiera Argentina” or “CFA”). Banco Galicia customers

also have access to telephone-banking services and to bancogalicia.com and Galicia Móvil, the

first financial Internet portal and the first payment service through cellular telephone, respectively,

established by a bank in Argentina. Furthermore, Banco Galicia is the Argentine leading bank in

terms of importance on social networks.

Contents

Financial Highlights

Letter from the Chairman

Board of Directors and Executive Officers

Annual Report

The Argentine Economy, the Financial System and the Insurance Industry

Review of Operations

Aspects related to Corporate Organization, Decision Making, Internal Control, and

Compensation Policy for Directors and Officers

Management’s Discussion and Analysis

Report on the Degree of Compliance with the Code on Corporate Governance

Annual Financial Statements

Notice of Shareholders Meeting

Additional information

2 Grupo Financiero Galicia Annual Report Fiscal Year 2015

FINANCIAL HIGHLIGHTS

December 31,

In millions of Pesos, except as stated otherwise 2015 2014 2013

For the Fiscal Year

Net Income 4,338 3,338 1,824

Average Shares Outstanding (in millions) (1) 1,300 1,300 1,261

Earnings per Share (1) (2) 3.34 2.57 1.47

At Year-end

Assets 161,748 107,314 83,156

Loans, Net 98,345 66,608 55,265

Deposits 100,039 64,666 51,395

Shareholders’ Equity 14,485 10,246 6,947

Shares Outstanding (in millions) (1) 1,300 1,300 1,300

Book Value per Share (1) 11.14 7.88 5.34

Selected Ratios (%)

Return on Average Shareholders’ Equity (2) 35.54 39.07 32.47

Return on Average Assets (2) 3.83 3.85 2.91

Financial Margin (3) 13.12 13.56 12.75

Shareholders’ Equity to Total Assets 8.96 9.55 8.35

Market Share (4) (%)

Deposits from the Private Sector 9.41 8.79 9.20

Loans to the Private Sector 9.60 8.76 8.78

Exchange Rate

Pesos per U.S. Dollar 13.005 8.552 6.518

(1) In fiscal year 2013, 58.9 million share increase is included in the calculation as from September 1, 2013 related to the merger

with Theseus S.A. and Lagarcué S.A.

(2) Calculated based on net income.

(3) Financial income less financial expenses, divided by average interest-earning assets. (4) The market share corresponds to deposits and loans in the Argentine market and is calculated based on daily information on

deposits and loans in the Argentine financial system, prepared by the Argentine Central Bank using end-of-month balances.


LETTER FROM THE CHAIRMAN

To our Shareholders,

I am pleased to address you in order to submit the Annual Report related to the 17 th Fiscal Year of

Grupo Financiero Galicia S.A. as of December 31, 2015.

In 2015, the international environment was characterized by a significant decline in the prices of

financial assets, commodities and currencies, which adversely affected the emerging economies.

The market volatility and the slower pace of growth of the global activity increased the investors’

risk aversion and caused a turnaround of capital flows from the emerging world.

Despite this environment, the Argentine market managed to differentiate itself due to the positive

expectations characterized by a year marked by politics and presidential elections.

As regards the Argentine economy, in 2015 private consulting firms estimate the growth of the

economic activity around 1.7%, which is a slight recovery, as compared to the prior-year decline,

within an inflationary environment of 27% annually.

During November, the presidential elections determined that Mauricio Macri was elected

Argentina’s president for the coming four years. Since the new administration took office, it

defined three great and challenging goals: zero poverty, to put an end to drug trafficking and unite

Argentina. At this stage, the approach to Argentina’s economic policy management is expected to

change. The new administration expressed the need to correct the accumulated imbalances on

several fields, which could have an impact on activity and employment during the first months of

the current year. The main challenges would be tied to the normalization of the foreign exchange

market, a lower tax deficit and the inflation rate deceleration. Provided that those problems are

successfully solved, the activity could resume the path of growth towards the second half of the

year and would lay the basis to achieve a greater expansion in the following years. In addition, the

foreign front will play a key role in the economic performance, particularly as regards the evolution

of the Brazilian economy, Argentina’s main business partner, and the agreement to be reached

with holdouts in order to normalize the access to the international capital markets.

In these first three months of administration, we may note a government that seeks to build

consensuses and wants to make Argentina reenter the world, in line with the above-mentioned

goals.

In fiscal year 2015, Grupo Financiero Galicia recorded profits for Ps. 4,338 million, 30% higher

than that recorded in fiscal year 2014. About 90% of this profit resulted from the interest in our

main subsidiary, Banco Galicia. This profit is supplemented by the interest in other subsidiaries,

basically in the insurance business through Sudamericana Holding and in mutual funds through

Galicia Administradora de Fondos.

The higher consolidated income for the period resulted from the 30% increase in net financial

income and the 38% increase in net income from services, in addition to an 8% decrease in the

provision for loan losses, partially offset with a 40% increase in administrative expenses.

Accordingly, the average return on equity (ROE) stood at 35.5%.

The credit exposure to the private sector reached Ps. 115,000 million, showing a 45.5% increase

during fiscal year 2015. Meanwhile, deposits amounted to Ps. 100,270 million, showing a 54.4%

increase. The Bank’s estimated market share as of December 31, 2015 was 9.6% in loans and

9.4% in deposits, considering the intermediation with the private sector.

These results exceeded our forecasts made one year ago, taking into account that 2015 was a

year characterized by an intense electoral schedule, which caused uncertainty as to the activity,


the tax and monetary aspects, as well as inflation levels. However, despite the challenging

economic environment and an increasingly complex regulatory environment regarding the financial

system, the Bank kept focus on meeting the customers’ needs with passion and dedication.

The first measures adopted by the new authorities of the Argentine Central Bank to encourage

competition among banks were positive ones, since the quotas for financing under credit lines for

the productive investment were made more flexible, maximum interest rates to grant personal

loans and minimum interest rates for certain time deposits were eliminated, the limits on the

position in foreign currency were changed and the opening of new braches was facilitated. We

expect that, likewise, the obligation to require the Argentine Central Bank’s authorization for

higher commissions on products for individuals is changed and the requirements for the payment

of dividends are relaxed.

The greatest challenge for the Argentine financial system for the coming years will be to keep

profitability levels that allow increasing the regulatory capital to face the expected growth of loans

in an environment of increased economic activity, especially if such growth is accompanied by a

deepening of the financial market at the levels of comparable countries in our region.

It is noteworthy the very good performance of the insurance business, in which we participate

through Sudamericana Holding, which reached income amounting to Ps. 409 million, mainly

resulting from the successful compliance with the plan developed to achieve a rise in the volume

of premiums.

Grupo Financiero Galicia’s Board of Directors will propose the Shareholders’ Meeting to pay

dividends in cash for Ps. 150 million.

To conclude, on behalf of Grupo Financiero Galicia’s Board of Directors and on my own behalf, I

would like to thank the shareholders for their ongoing trust, over 12,000 employees for their

dedication, commitment and enthusiasm, the suppliers for their support, and customers, the focus

of our decisions, for choosing us every day.

Eduardo J. Escasany

Chairman of the Board of Directors

Autonomous City of Buenos Aires, March 9, 2016


GRUPO FINANCIERO GALICIA S.A.

BOARD OF DIRECTORS

Eduardo Escasany

Chairman

Pablo Gutiérrez

Vice-Chairman

Abel Ayerza

Federico Braun

Antonio Garcés

C. Enrique Martin

Luis Oddone

Silvestre Vila Moret

Directors

María O. Hordeñana de Escasany (†)

Sergio Grinenco

Alejandro Rojas Lagarde

Augusto R. Zapiola Macnab

Alternate Directors

SUPERVISORY SYNDICS’ COMMITTEE

Norberto D. Corizzo

Luis A. Díaz

Enrique M. Garda Olaciregui

Syndics

Miguel N. Armando

Fernando Noetinger

Horacio Tedin

Alternate Syndics

EXECUTIVE OFFICERS

Pedro Richards

Managing Director

José L. Gentile

Chief Financial and Accounting Officer

(†) María O. Hordeñana de Escasany has been an alternate director of Grupo Financiero Galicia since the Company’s

creation until her death, on September 18, 2015. She has also played an outstanding role at Fundación Banco Galicia. She

has chaired it for more than forty years and she has personally served to provide the help needed by Banco Galicia’s

employees and retirees and their families. She will be specially remembered for her warm and kind manner, and we pay

tribute to her loving memory.


BANCO DE GALICIA Y BUENOS AIRES S.A.

BOARD OF DIRECTORS

Sergio Grinenco

Chairman

Pablo Gutiérrez

Vice-Chairman

Guillermo J. Pando

Secretary Director

Luis M. Ribaya *

Raúl H. Seoane

Pablo M. Garat

Ignacio A. González

Directors

Enrique García Pinto

C. Enrique Martin

Augusto R. Zapiola Macnab

Oscar J. Falleroni *

Alternate Directors

Supervisory Syndics’ Committee


Norberto D. Corizzo

Luis A. Díaz

Syndics

Fernando Noetinger

Miguel N. Armando

Horacio Tedin

Alternate Syndics

*It is evidenced that Mr. Luis M. Ribaya resigned his position on December 18, 2015 and Mr. Oscar J. Falleroni, CPA,

resigned his position on January 19, 2016.


EXECUTIVE OFFICERS Chief Executive Officer Daniel Llambías (1)

Retail Banking Division Manager Germán Ghisoni

Wholesale Banking Division Manager Sebastián Pujato

Financial Division Manager Pablo León Castro

Comprehensive Corporate Services Division Manager Gastón Bourdieu

Organizational Development and Human Resources Division

Manager Rafael Bergés

Planning Division Manager Bruno Folino

Credit Division Manager Marcelo Poncini

Risk Management Division Manager Diego Rivas

Customer’s Experience Division Flavio Dogliolo

Institutional Relations Division Manager Pablo Firvida

Legal Advisory Division Manager María Elena Casasnovas

Audit Division Manager Omar Severini

Anti-Money Laundering Unit Division Manager Claudia Estecho

Compliance Division Manager Carlos Dieta

Board of Directors Secretariat Patricia Lastiry

(1) As from April 4, 2016, Mr. Fabián Kon will hold that position. The appointment is subject to the Argentine

Central Bank’s approval.

SUDAMERICANA HOLDING S.A.

Sebastián Gutierrez

Chief Executive Officer

GALICIA ADMINISTRADORA DE FONDOS S.A.

Ezequiel Rosales

Chairman

TARJETAS REGIONALES S.A.

Miguel Peña


COMPAÑÍA FINANCIERA ARGENTINA S.A.

Pablo Caputto


GALICIA WARRANTS S.A.

Santiago Pasman



ANNUAL REPORT

The Board of Directors submits to the Shareholders for their consideration, the Annual Report, the

Financial Statements and the Supervisory Syndics Committee’s Report for the 17th fiscal year of

Grupo Financiero Galicia S.A. as of December 31, 2015.


The Argentine Economy, the Financial System and the Insurance Industry

The Argentine Economy

In 2015, the international economic environment showed somehow more adverse for emerging

economies in general, deepening the downward trend of financial assets, commodities and

currencies that began being noticed by the end of 2014. Certain decrease in the expansion

direction of the monetary policy of developed economies and renewed doubts about the pace of

growth of the global economy determined an increase in the investors’ risk aversion and a

turnaround of capital flows in the emerging world.

Developed economies expanded at an estimated 1.9% rate. The United States and Spain stood

out, with a 2.5% and 3.2% growth, respectively. Europe ended the year with a 1.5% increase, a

1.7% projection both for 2016 and 2017. In turn, the emerging economies continued decelerating

their pace of expansion, growing by 4.0% in 2015, with 4.3% and 4.7% projections for 2016 and

2017, respectively.

The strong expectation as to the rise in the reference rate by the U.S. Federal Reserve during the

whole year – which finally took place in December – correlated with a U.S. Dollar appreciation by

9.2%, as compared to the other developed currencies, and 16%, as compared to emerging ones.

Meanwhile, Latin American currencies depreciated by 24%, on average, as compared to the U.S.

Dollar throughout the year. This U.S. Dollar appreciation affected the price of raw materials,

whose general index decreased by 25%. In turn, the companies’ market value was characterized

by a high volatility and reflected a global loss of 4.1%, with a 2.6% and 17% decline in developed

and emerging markets, respectively. The local market operated the other way round, due to the

circumstances of the local current situation. The Merval index achieved a 36% rise in the year.

In 2015, the Argentine economy achieved certain recovery during the first half of the year, after a

recessionary 2014. Some private estimates reflect a growth in the economic activity of around

1.7%, a figure that contrasts with the 2.6% drop noted in 2014. The worse performance of the

activity towards year-end would leave a nil carryforward for 2016.

It is noteworthy that the economic activity figures, like the other statistical series prepared by the

Argentine Institute of Statistics and Census (INDEC, as per its initials in Spanish), were

discontinued in last December by the new national administration, ordering the state of

administrative emergency of the National Statistics System for the sake of review and

readjustment of the series published. They would not be relaunched until mid-2016.

In terms of the local market, the recovery noted in the activity apparently began having a positive

impact on the employment dynamics. The unemployment rate for the third quarter of 2015 – last

available data – stood at 5.9% of the economically active population from 7.5% noted in the same

quarter of 2014. Anyhow, the employment statistics published by the INDEC are also under

analysis.

In the monetary sphere, the main monetary aggregates accelerated their pace, standing above the

nominal growth of the economy. The monetary base ended the year with an annual 34.9%

expansion, 12.2 percentage points (p.p.) above the 2014 growth. Particularly, this monetary

aggregate increased by Ps. 161,325 million, which is almost exclusively due to the increased

financing to the National Treasury (Ps. 177,926 million) and, to a lesser extent, the item “Other”

(Ps. 57,597 million), particularly significant in 2015, as a result of the settlement of U.S. Dollar

futures contracts after the devaluation. This expansion was partially offset by the sale of foreign

currencies, which resulted in an absorption of Ps. 71,822 million in the year. In addition, repo

transactions increased by Ps. 5,777 million, while transactions related to Argentine Central Bank

Bills and Notes (Lebacs and Nobacs, respectively) decreased by Ps. 8,734 million. This trend was


as well reflected in the performance of the private-sector M2 (money in circulation and deposits in

savings and checking accounts that belong to the private sector), which grew 30.6% in 2015, as

compared to a 27.7% growth in 2014. On the other hand, total M2 (including deposits from the

public sector) ended 2015 with a 28.5% growth, after increasing by 28.9% in the prior year.

Domestic interest rates evolved at the pace of the expectations regarding the evolution of the

foreign exchange market. During the first half, the foreign exchange stability and the banks’

restored liquidity allowed keeping rates in a relative calm environment. However, interest rates on

time deposits ended 2015 at levels highly above those in the first months of the year, which

reflects the increasing foreign exchange stress and the rise in the Argentine Central Bank’s

reference rates during the last weeks of 2015. Particularly, Badlar, which reached a minimum of

19.6% during the year, in January, averaged a value of about 27% in December.

The reference exchange rate established by the Argentine Central Bank increased from Ps. 8,552

to Ps 13,005 per U.S. Dollar between December 30, 2014 and December 31, 2015, equivalent to

a 52.1% depreciation; while the average exchange rate increased from Ps. 8.12 per U.S. Dollar in

2014 to Ps. 9.27 per U.S. Dollar in 2015.

According to private estimates, inflation in 2015 was about 27%, considerably below the 2014

levels of the 40% inter-annually. Particularly, the Consumer Price Index of the City of Buenos

Aires (IPCBA, as per its initials in Spanish) – an alternative inflation measure proposed by the

INDEC after it discontinued its index – showed a 26.9% growth in prices in 2015 from 38%, as

shown a year ago.

In the fiscal area, tax revenues, including social security, accumulated an annual 30.0% increase

until November 2015 (the last data available as of the date of preparation of this document), as

compared to the inter-annual 36.3% expansion in 2014. On the other hand, primary expenditures

increased by 34.8% on an annual basis in 2015. Thus, the Argentine public sector recorded a

primary deficit (including extraordinary resources derived from ANSES (National Social Security

Administration) and the Argentine Central Bank) amounting to Ps. 70,448 million in the first 11

months of the year, equivalent to 1.5% of the Gross Domestic Product (“GDP”). This figure

entailed a decline, as compared to the primary deficit in the same period of 2014 (0.4% of GDP),

amounting to Ps. 15,225 million. After interest payments accumulated up to November for Ps.

96,080 million, the financial deficit amounted to Ps. 166,528 million, equivalent to 3.4% of GDP.

Regarding the external sector, during 2015, the foreign exchange balance current account

published by the Argentine Central Bank – the data on the balance of payments (on an accrued

basis) were discontinued by the INDEC – reached a deficit amounting to US$ 11,593 million,

which represents a significant decline, as compared to that in 2014, which amounted to US$

2,350 million. The current account deficit, measured in terms of GDP, stood at about 2% in 2015.

This decline was partly due to a decrease in the year’s balance of trade surplus, the positive

balance of which amounted to US$ 3,547 million, US$ 5,388 million lower than the amount

reached in 2014.

Particularly, revenues for collections of exports of goods amounted to US$ 57,012 million in

2015, which showed a 18% drop, as compared to the level noted in the prior year and which

represents the minimum revenues for the last six years. The highest backward step was noted in

the oil seeds, oils and cereals sector, which showed collections for exports 26% lower than the

revenues in the same period of the prior year, mainly explained by the lower prices of the most

important commodities for the country (soy, soy flour, corn and wheat).

On the other hand, during 2015 the payments of imports of goods of the foreign exchange

balance amounted to US$ 53,465 million, there being an inter-annual decline of 12% (about US$

7,200 million), in an environment of both declines in the level of foreign purchases and an increase

in the estimated debt for this item. From the sector viewpoint, a decline in the payments of


imports was noted in the main activity sectors, with higher impact on energy and automotives,

whose payments of imports were 37% and 12% lower than those noted in 2014, respectively.

Furthermore, the data of the Argentine Trade Exchange (“ICA”, as per its initials in Spanish)

showed a considerable backward step in exports and imports (on an accrued basis) in 2015,

resulting in a balance of trade deficit amounting to US$ 3,035 million, after 15 years of surplus.

In particular, the exports (on an accrued basis) showed an annual 17% decline, totaling US$

56,752 million, as a result of a 16% drop in prices and 1% decrease in quantities. All large

industries – Commodities, Agriculture and Livestock Manufacture (“MOA”, as per its initials in

Spanish), Industrial Manufacture (“MOI”, as per its initials in Spanish) and Fuels and Energy – had

a lower export value. Whereas both prices and quantities decreased for MOI and Fuels and Energy,

for Commodities and MOA the decrease resulted from a considerable drop in prices, offset by an

increase in quantities.

The value of imports (on an accrued basis) for 2015 (US$ 59,787 million) was 8% lower than that

in 2014 due to a 13% drop in prices and a 5% increase in quantities. The lower value of imports

was mainly explained by the drop in the prices of Fuels and Lubricants.

Within this environment, the non-financial private sector’s capital account (as per estimates made

by the single free exchange market or MULC, as per its initials in Spanish) posted a net foreign

currency outflow of US$ 5,961 million in 2015, as compared to a net outflow of US$ 237 million

in 2014. As of December 31, 2015, the Argentine Central Bank’s international reserves amounted

to US$ 25,563 million, US$ 5,879 million below what was noted in late 2014.

The Financial System

In 2015, the financial brokerage activity accelerated the pace of growth, reversing the 2014 trend.

Accordingly, the financial system’s depth measured by the loans-to-private-sector to GDP ratio

increased by 1.7 p.p. during the year and stood at 16.5%.

Total loans to the private sector in the financial system grew 37.2%, when compared to the end

of 2014, reaching Ps. 812,837 million. Loans that increased the most were consumer credit lines,

made up of loans through credit cards and personal loans, which increased by 47.4%, reaching

Ps. 355,922 million at year-end. As regards commercial loans, mainly made up of overdrafts,

promissory notes and discounted and purchased notes, they grew by 35.7%, amounting to Ps.

304,005 million. Collateral loans increased by 22.6%, with a final balance of Ps. 40,304 million,

while mortgage loans increased by 15.9%, to Ps. 56,530 million. In turn, loans to the public

sector accounted for 9.9% of total assets as of November 2015 (the last information available),

increasing 1.8 p.p. inter-annually.

The financial system’s total deposits increased 37.7% during the year, reaching Ps. 1,335,662

million. Deposits from the non-financial private sector increased 47.3%, amounting to Ps.

1,048,300 million, whereas deposits from the public sector reached Ps. 286,908 million,

representing a 12.1% growth. Within deposits from the private sector, transactional deposits grew

37.6% reaching Ps. 509,521 million, while time deposits increased 60.7%, reaching Ps. 508,454

million.

The average interest rate paid by private banks in December for time deposits in Pesos of up to 59

days was 27.9%, with an increase of 648 basis points (b.p.) inter-annually, while in the case of

lending rates, that applicable to overdrafts was 34.5% (+365 b.p.) and to promissory notes,

30.6% (+447 b.p.).

In November 2015, financial institutions slightly decreased their liquidity levels (in relation to total

deposits) when compared to the prior year, with an average rate of 24.9%, as compared to


26.7% in the same month of the prior year. In financial standing terms, the Argentine financial

system’s net worth increased by Ps. 54,335 million, what represents a 33.0% growth. The

system’s profitability was equivalent to 4.0% of total assets (-0.3 p.p.), while return on

shareholders’ equity was 31.4% (-2.2 p.p.).

During the first 11 months of the year, income from interest and income from services represented

5.4% and 4.2% of total assets, respectively. In turn, administrative expenses increased from

7.4% to 7.6% of total assets, while provisions for loan losses decreased to 0.9% of total assets

from 1.0% in November 2014.

The non-accrual loan portfolio to the non-financial private sector reached 1.7% in November 2015,

0.3 p.p. below when compared to the same month of the previous year. The coverage of the

private-sector non-accrual loan portfolio with allowances increased to 146% from 140%

represented in November 2014.

As to the financial system's structure, as of November 30, 2015, the financial system was

composed of 80 financial institutions, considering both banks and non-banking institutions. Of

such total, 64 were banks, of which 52 were private banks. Also, of the latter, 33 were domestic-

owned private banks and 19 were foreign-owned banks. Government-owned banks were 12 and

non-banking financial institutions were 16.

The concentration of the financial system, measured by the market share of private sector

deposits of the ten leading banks, reached 76.0% as of November 30, 2015, a similar percentage

to the one recorded in the same month of 2014.

Based on information as of September 2015 (the last information available), the Argentine

financial system’s banks employed a total of 107,836 people, representing a 1.7% increase from

December 31, 2014.

The Insurance Industry

During 2015, the insurance market’s production amounted to Ps. 153,300 million, 40.7% higher

than the production level in 2014, measured at current values.

Out of total production, 81% relates to P&C insurance, among which insurance for automotives

(44%) and workers’ compensation (35%) stand out, 17% to life and personal insurance, where

the most important one is group life insurance (68%), followed by individual life (14%) and

personal accidents (13%), and the remaining 2% relates to retirement insurance.

Outlook

An economic and financial scenario marked by a change of approach to the country’s economic

policy management is expected in 2016. The new administration expressed the need to correct

the imbalances on several fields, which could have an impact on activity and employment during

the first months of the year. The main challenges would be tied to the final normalization of the

foreign exchange market, a lower tax deficit and the inflation rate deceleration in a foreign

exchange and rate adjustment environment. A quick solution to the problem with the default debt

holders would allow reentering the international capital market. Provided that those obstacles are

successfully overcome, the activity could resume the path of growth towards the second half of

the year and would lay the basis to achieve a greater expansion in the following years.

Although export prices would be, on average, below what was noted during the peaks of 2012

and 2013, the expectations regarding exportable balances of crop production are optimistic. On

the other hand, the contraction outlook for the Brazilian economy (Brazil is Argentina’s main


business partner) would less boost exports and the domestic industry (particularly the automotive

industry). The international environment might contribute certain volatility as long as there is a

more intense pressure on the currencies of the region and the exchange terms.

In turn, the financial system will continue increasing gradually the intermediation with the private

sector, driven by different changes in effective regulations the new government is carrying out,

and that would lead to a more deregulated financial system, creating the bases for increased

competitiveness and efficiency, in line with Latin American banks. The low leveraging level

regionally compared at companies and families, as well as the lower levels of use of banking

services evidence the Argentine financial institutions’ potential.

In financial standing terms, net results will help maintain capitalization levels according to Basel

Committee regulations. Income from services will still be significant within operating income,

whereas the banks will continue working on administrative expenses in order to improve the

operating efficiency.

Portfolio quality indicators have been strength over the last few years despite the modest

economic growth and both the non-accrual loan portfolio and its coverage with allowances have

been kept in similar figures. Although 2016 is expected to be another year of low economic

growth, these indicators would remain at 2015 levels.

To conclude, we consider that the financial system, which has excellent fundamental indicators,

would have a positive financial result in 2016, with a mid- and long-term macroeconomic

environment with renewed and promising expectations.

The outlook for 2016 of the insurance market does not anticipate major changes, with production

growth levels near those recorded in 2015. In order to reduce the technical losses, the market

shall restore its rates, as well as focus on improving its costs and loss experience ratios. Due to

the expected rise in interest rates and the currency devaluation for the coming fiscal year, the

financial income will continue driving the insurance market’s results of operations, paying the

technical losses that arise.

Homeowners and office package insurance is expected to continue with the upward trend as a

result of a higher demand for such insurance, given the low market penetration of these products,

along with a higher insurance awareness of the population in general. Life insurance is likely to

continue growing, for which it will mostly depend on the tax incentives the government may grant

to this type of insurance.




Banco de Galicia y Buenos Aires S.A.

Wholesale Banking

Retail Banking

Consumption

Financial Division

Risk Management

Credit

Comprehensive Corporate Services

Organizational Development and Human Resources

Sudamericana Holding S.A.

Galicia Administradora de Fondos S.A.

Galicia Warrants S.A.

Net Investment S.A.



Grupo Financiero Galicia

Grupo Financiero Galicia’s corporate purpose is exclusively related to financial services and

investment.

Grupo Financiero Galicia’s strategy is to continue establishing itself as one of Argentina’s leading

comprehensive financial services companies while continuing to strengthen Banco Galicia’s

position as one of Argentina’s leading banks. Its main objective is to create value for its

shareholders within a framework of sustainable management that considers the social context and

the impact on the environment.

On September 10, 2013, Grupo Financiero Galicia, as merging company, entered into a Preliminary

Merger Agreement, for the total assets and liabilities of Lagarcué S.A. and Theseus S.A., as

merged companies.

At Grupo Financiero Galicia’s Extraordinary Shareholders’ Meeting held on November 21, 2013,

the aforementioned documents were approved, as well as the exchange ratio and the capital

increase by Ps. 58,857,580, through the issuance of 58,857,580 ordinary book-entry Class “B”

shares, with a face value of Ps. 1 and one vote per share, entitled to take part in the distribution

of profits as from the fiscal year commenced on January 1, 2013.

On December 18, 2013, the Final Merger Agreement was signed. Therefore, Grupo Financiero

Galicia incorporated the aforementioned companies by absorption in force as from September 1,

2013. Accordingly, a total of 25,454,193 Class “B” shares of the controlled company, Banco

Galicia, representing 4.5% of the capital stock, owned by Lagarcué S.A. and Theseus S.A. were

incorporated. Consequently, Grupo Financiero Galicia held 560,199,603 shares of Banco Galicia,

representing 99.6% of the Company’s capital stock and votes. As of December 31, 2012, it held

533,814,765 shares, representing 94.9% of the capital stock and votes.

On February 27, 2014, the Board of Directors of the National Securities Commission (CNV) gave

its consent to the merger by absorption of Grupo Financiero Galicia with Lagarcué S.A. and

Theseus S.A., and to Grupo Financiero Galicia’s capital increase, ordering its registration.

On February 25, 2014, the Board of Directors decided to make the unilateral statement of

willingness to acquire all the remaining shares of Banco Galicia held by third parties, which

amounted to 2,123,962 shares. The price was set at Ps. 23.22 per share, which was approved by

the CNV’s Board of Directors on April 24, 2014. In compliance with effective regulations, Grupo

Financiero Galicia made the publications required and deposited the amount related to the total

remaining shares outstanding of Banco Galicia held by third parties. On August 4, 2014, the

above-mentioned statement of willingness to acquire was executed by public deed.

In addition, on April 15, 2014, the Board of Directors approved the purchase of 19,000 shares

representing 95% of Galicia Administradora de Fondos S.A.’s capital stock (hereinafter “Galicia

Administradora de Fondos” or “GAF”) from Banco Galicia in the amount of Ps. 39,481,302.

On October 28, 2015, Mercado Abierto Electrónico (MAE), through Resolution “C” 4916,

authorized the listing and trading of Grupo Financiero Galicia S.A.’s Class B Book-entry Ordinary

Shares, with face value of Ps. 1 each, and entitled to one vote per share.

The following is a description of the subsidiary companies’ operations during the fiscal year.


Banco Galicia

Wholesale Banking

e-platform

The number of transactions performed through Office Banking increased by 55%, as compared to

the previous fiscal year. During 2015, more than 20 platform implementations were carried out,

such as the possibility of making payments to the Argentine Revenue Service (“AFIP”), selling

checks in custody with online crediting of funds, authorizing multiple transactions in only one step,

making the model of users related to more than one company simpler and others to improve the

customer’s experience in the channel and its design, and optimizing the security and use of the

platform. In the syndicated survey conducted among several banks, Office Banking achieved the

first place of customers’ preference to transact in the segments analyzed.

The Interbanking clearing house also continued optimizing, increasing the volumes transacted, as

compared to 2014, by 38%. At year-end, Banco Galicia was ranked first in terms of number of

transactions and volume transacted in AFIP Payments.

Also, the SWIFT channel had a transactional growth of 63%, as compared to the previous year; an

operation the Bank continues repositioning.

Transactional Products, Investments and Insurance

In 2015, the goals were focused on creating increased efficiency in the transactional products, in

providing excellent experience to customers and in developing new products that allow the Bank

to differentiate itself from competitors.

The following products stood out: i) the launch of Cobranza Integrada Galicia (Galicia Integral

Collection) at smart self-service terminals (TASI, as per its initials in Spanish), a product intended

to meet collection needs of companies from the Micro / PES (small-sized companies) segments

through automated channels; and ii) remote deposits, with a 155% increase in volume, reaching

Ps. 2,600 million through the processing of 657,000 checks (a 48% increase, as compared to

2014) sent remotely by 130 service user companies, a transaction that allows releasing cash

desk’s time and make customers loyal.

Through the specialized management, Hail Insurance was purchased for more than 151,000

hectares, resulting in significant commissions earned.

Additionally, in order to optimize cash movements, the treasury of Branch 990, which is located at

Torre Galicia (Corporate Tower), was implemented. This allowed receiving more than Ps. 1,000

million in cash from CIG collections, which were formerly channeled through different branches in

downtown Buenos Aires and the area around it. This improvement generated a total saving of Ps.

3 million in money transport, in addition to releasing time and workload at branches.

Large-Corporations Banking

As in previous years, during 2015, Banco Galicia maintained its leading position and consolidated

its presence in the corporate segment, managing to be ranked among the best in the market,

according to the last survey conducted by Brain Network.

This was attained thanks to a successful commercial planning, the improvement in the service

offering and the implementation of a differentiated advisory model, which made the Bank be close

to its customers’ needs.


During the fiscal year, the Corporate Customer service was implemented to channel and solve

post-sale in a faster and more personalized manner, managing to provide the customer with an

excellent experience. Thanks to the performance achieved and the ongoing search for tailor-made

solutions, the volumes of transactional products increased by over 45%, as compared to the prior

year.

Capital Markets and Investment Banking

In 2015, Banco Galicia consolidated its position in the capital market and investment banking,

structuring different financing products designed tailor-made to corporate, PyMEs (small- and

medium-sized companies) and agricultural companies. The Bank organized and structured more

than 115 transactions, 31 syndicated and structured loans were carried out, 88 issuances in the

capital market, with a wide variety of products, which included, among others, advice on mergers

and acquisitions (M&A), negotiable obligations, short-term securities, bills and financial trusts.

The most important transactions that stand out are issuances of oil sector companies, such as

YPF, Pan American Energy and Axion Energy, for more than Ps. 7,500 million, the issuances of

automotive financial sector companies, such as Fiat, Toyota and Mercedes Benz, for more than Ps.

700 million, the companies related to Grupo Financiero Galicia, such as Tarjeta Naranja, Tarjetas

Cuyanas, CFA and Grupo Financiero Galicia itself for more than Ps. 3,000 million and, finally, the

issuances of bills, such as the City of Buenos Aires, the Province of Buenos Aires and the Province

of Neuquén, for more than Ps. 14,700 million.

Syndicated transactions were structured for Ps. 5,588 million. The most outstanding are those

granted to Ledesma for Ps. 1,260 million, to Bayer for Ps. 1,000 million, to Nidera for more than

Ps. 1,125 million and to Axion Energy for Ps. 300 million.

Companies

In 2015, the Companies segment division was created, whose mission is to develop the business

strategy based on three mainstays: value proposal, service model, and acquisition & development.

The customer portfolio is made up of companies whose annual revenues range from Ps. 70 million

to Ps. 700 million expanded throughout the country.

The service model based on closeness, specialization and integrated equipment to serve this type

of customers continued growing and consolidating, reaching a total of 19 Corporate Banking

Centers, made up of professional and specialized Business Officers. The synergy with the network

of branches is supplemented with a team of professionals specialized in foreign trade and treasury

solutions at each center, providing a comprehensive service that is tailor-made to each business,

with decentralized and regional decision and resolution.

As regards making customers loyal, more than 30 types of events were organized throughout the

country, providing customers with updates on politics and economy, foreign trade regulations and

training courses in collections and payments, among others.

During the fiscal year, Banco Galicia kept is leading position as main bank of the segment,

primarily standing out in the placement of loans and the purchase of checks of the Credit Line for

the Productive Investment (the “Productive Line”), the financing of working capital and the

updates of Office Banking, the electronic channel designed to improve the customers’ experience.

Agricultural Sector


In 2015, Tarjeta Galicia Rural held a market share above 37% within the specific cards of this

segment, with a 30% increase in the sales volume, as compared to 2014, exceeding Ps. 7,700

million.

More than 95 agreements at zero rate remained in force with leading companies in the sector,

which seek to maximize the offer of services to agricultural companies. Among the business

actions carried out during the fiscal year, we should highlight multiple offers to finance the

agricultural campaign, structuring loans tailor-made to each producer and the financing of capital

goods, such as agricultural machinery, vehicles and other investments in production implements,

as well as the investment in the purchase of bellies for the growth of breeder herd through the

Productive Line, and capital market transactions were also carried out.

During the fiscal year, the thirteenth edition of the Excelencia Agropecuaria La Nación - Banco

Galicia Award (La Nación-Banco Galicia’s Agricultural Excellence Award), with more than 214 jobs

submitted, was achieved, and Banco Galicia - Revista Chacra a la Gestión Solidaria del Campo

Award (Banco Galicia-Chacra Magazine’s Rural Solidarity Award), the FOCA Awards to the

Sustainable Agricultural Practices and CAPA-Banco Galicia Award to the agricultural journalism

were granted.

Like in previous fiscal years, the Bank supported the research and outreach activities of

Universidad Austral, with active participation receiving delegations. The Bank also continued

supporting the activities of the Fundación Producir Conservando, and continued supporting the

work of Asociación Argentina de Productores en Siembra Directa (Argentine Association of No-till

Farming) (Aapresid, as per its initials in Spanish) with the purpose of spreading the agriculture

certified in Argentina, as well as different activities promoted by Consorcios Regionales de

Experimentación Agrícola (Agricultural Experimentation Regional Consortiums) (CREA, as per its

initials Spanish) for the sector, and the support to the Líderes (Leaders) training program. On the

other hand, the Bank was actively involved with Confederaciones Rurales Argentinas (CRA)

(Argentine Rural Confederations) and regional confederations, and supporting the Rural Societies in

the interior of the country. It was also in close relationship of cooperation with Sociedad Rural

Argentina (SRA) and support to its training program for CEIDA’s agricultural leaders, in which a

Bank’s employee takes part annually. We kept the active presence in the board of ASAGIR, the

association of the sunflower chain, and the cooperation with the other value chains of the main

agricultural crops.

The Bank was present at 217 events, which represented a 351-day presence effort throughout the

country.

Finally, Tarjeta Galicia Rural’s loyalty plans were carried out with the main four livestock breeds –

Hereford, Aberdeen Angus, Brangus and Braford – building closer relationships with the

associations and extending the cooperation agreements held with them with benefits for

associates.

Non-financial Public Sector

During the fiscal year, the business management was focused on keeping and growing the

businesses generating transactional flows, enabling the growth of sight deposits, without

neglecting the advisory services to customers to attract time deposits.

Once the campaign aimed at Automotive Property Registries has been completed, the Bank

managed to attract 60% of the market. Based on the business analysis, it was decided that as

from 2016 these customers will be served from the network of branches (520 checking accounts).


Moreover, new non-traditional businesses continued being generated, such as the exchange of

physical money of low denomination throughout the country for electronic money (Correo Oficial

de la República Argentina).

The highest value was to sustain the level of customers and their related businesses in the course

of a year of elections.

Foreign Trade

The foreign trade volume (imports + exports) amounted to US$ 13,268 million in 2015, which

accounts for 11% of Argentina’s balance of trade.

The participation of customers who perform foreign trade transactions through Galicia Office is

64%.

During the fiscal year, seminars on exchange regulations updates in different marketplaces of the

country took place, attended by over 550 people from all segments, which allowed the Bank to be

close to its customers with customized advisory services. The training at schools of Corporate

Officers (“OFES”, as per its acronym in Spanish) and different sectors of Head Office also

continued.

Furthermore, the work to ensure the Foreign Trade Officers’ specialization and the service quality

of the Companies segment at the Corporate Banking Centers distributed throughout the country

continued.

Galicia Comex, the Foreign Trade specialized site, continues consolidating as a market reference.

During the second half of 2015, the Foreign Trade Project started, the end of which is expected

for the first quarter of 2019. With this word-class project, Banco Galicia technologically replaces

the systems that it currently uses to channel, process and manage Foreign Trade transactions, and

includes the introduction and update of Office Banking functionalities for customers.

Retail Banking(1)

Retail Banking continued consolidating its business strategy differentiated by segment and defined

its challenges for the 2016-2020 period, which consist in building jointly with all areas a

customer-oriented culture, leading the digital transformation in the financial market and in that of

new competitors, developing the design of the multichannel strategy creating the customer’s best

experience, developing innovative products and services, and increasing the strategies by segment

to keep a leading position.

Focused on these challenges, we redesigned the Retail Banking’s structure, creating the Marketing

Division, including segments, products, advertising and business intelligence, and the Digital

Division, whose mission is to rank the Bank as the best digital bank in Argentina. The primary goal

is to direct the organization, either through its technical or its business areas, towards a dynamics

that allows competing in this area, accelerating the cycles of design, development and execution

of the channels, products and campaigns with a strong customer-oriented approach. In turn, the

Channels Division’s goal will be to continue developing indirect sales channels, the sellers, the

retail sales unit, agreements and payroll, and encouraging synergies with group companies.

1) The figures in this section relate to the Bank individually, without consolidation with the regional credit-card companies

or with CFA.


The Retail Banking Division’s customer base grew 10% during 2015, exceeding 2 million

customers.

Segments

During 2015, in order to continue creating a differentiating experience focused on the customer,

the development of the value proposal was strengthened for the Business and PyMEs segment and

the leadership in the High-Income segment was consolidated.

Galicia Negocios y Pymes (Galicia Business and Pymes – Small- and medium-sized companies)

stood out because of being ranked as leader regarding customer satisfaction of this segment,

according to studies conducted by private consulting firms, increasing the customer base by 11%

and leading the most chosen portfolio, achieving a 29% penetration. The most important business

achievements were the 16% increase in payroll accounts and, at credit level, the placement of the

Productive Line for over Ps. 1,540 million in the segment. The leadership of the Visa Business card

is also evidenced in the consumption market share, as per the information furnished by Visa.

The Good Businesses Meetings continued being carried out, with meetings in the cities of Buenos

Aires, Córdoba, Santa Fe, Mendoza, Mar del Plata and, for the first time, in Resistencia/Corrientes.

In 2015, more than 3,400 PyMEs businessmen took part in these training sessions and business

contact generation, and more than 180,000 people were present at the live broadcast through

buenosnegocios.com.

The presence at trade fairs, with business teams and spaces at nine exhibitions, was kept to

consolidate the closeness with the segment’s customers.

The buenosnegocios.com community has more than 25,000 users and 15,000 registered

companies, and received more than 750,000 visits during the year.

The Bank widely leads the customer satisfaction indexes. Using the Net Promoter Score (“NPS”)

measurement system, Banco Galicia was ranked first in Micro-Companies, with a 37% index and

25 p.p. above the second position, and Small-sized Companies, with 29% and 15 p.p. above its

immediate follower, considerably exceeding the indexes reflected in 2014 in both subsegments.

In a strong competitiveness situation, the Galicia Éminent service evidenced an interannual 16%

growth of customers. In turn, as regards satisfaction, it achieved the first position, according to

studies conducted by private consulting firms through an ongoing customer focus. The High

Income NPS exceeded the second one by 9 p.p. and kept the satisfaction levels achieved in 2014.

The Bank also kept its leadership in premium credit card consumptions throughout the year, as per

the information furnished by Visa, American Express and Mastercard. On the other hand, and to

continue improving its customers’ experience, it began remotely serving customers who value a

remote service, as well as rewarding them for recommending Banco Galicia to their group of

friends. These achievements make Galicia Éminent continue being the financial service best

remembered and valued among the segment’s people.

In order to continue building a customer-oriented organizational culture, general income was

managed differently by subsegments, giving priority to the development of the most chosen brand

and focusing on the Prefer and Move subsegments.

For the purpose of listening to customers and generating a virtuous cycle of ongoing improvement,

the NPS methodology was implemented at the main points of contact. As regards General Income,

to which this methodology began being applied in 2015, the Bank was ranked second, increasing

its satisfaction level by 1 p.p.


The growth of customers was an interannual 6%, improving the customer portfolio structure

thanks to the development of indirect channels and the online sale channel, which, at the same

time, made acquisition costs more efficient.

We worked mainly on the acquisition of new customers in the young people segment, not only

through the university channel, but also on the online channel. The latter represents 25% of the

total additions of MOVE. In this regard, the use of platforms, such as Facebook, Google, YouTube

and Whatsapp, increased in the customer relation and relationship processes, consolidating the

concept of “bank without branches, 100% online” as differential brand attribute. The Bank

currently has over 100,000 MOVE customers and is present at 17 universities.

Furthermore, we worked on the efficiency by analyzing the profitability of channels and migrating

transactions among channels, always taking into account the customers’ preferences or habits.

Private Banking

Private Banking offers distinctive and professional financial services to individuals with high-sized

net worth, through the management of their investments and the provision of financial advisory

services. Private Banking offers its customers a wide range of domestic financial investment

alternatives, such as deposits, FIMA mutual funds, government and corporate securities, shares

and trusts where the Bank acts as a dealer.

One of the Private Banking premises, in line with the Bank's strategy to differentiate from

competitors through service quality, is the preferential treatment of its customers. In this regard,

the service has highly-trained officers, an investment center that operates from 8 a.m. to 6 p.m., a

wide network of Éminent officers, exclusive spaces for service at branches and the sixteenth floor

of Torre Galicia (Galicia Tower).

Channels

Indirect Channels

In 2015, the Indirect Channels Division was consolidated, whose mission is to develop internal and

external channels to attract new customers and market Consumer Banking products. The area is

made up of the Retail Sales Unit (focused on cross-selling and attraction of customers with direct

payroll deposit), Indirect Sales Channel (focused on attracting customers through agreements with

third parties, with mass capacity of distribution, allowing an increase in the capillarity of points of

sale) and Commercial Planning of Telephone Banking (focused on attracting customers and cross-

selling through internal and external call centers). During the year, the division attracted 44% of

the Bank’s new customers.

Agreements and Payroll

The Bank also continued consolidating its leadership in direct payroll deposit, increasing by 3.48%

the number of customers, as compared to 2014, increasing its market share. Furthermore, the

average salary per capita improved, with direct impact on sight deposits.

The agreements with associations, and other entities and associations (Colegio Público de

Abogados de la Capital Federal (Bar Association of the City of Buenos Aires), Asociación

Odontológica Argentina (Argentine Dental Association), Consejos Profesionales de Ciencias

Económicas (Professional Councils in Economic Sciences), etc.), increased, achieving more

deposits, customers and payroll for the Bank.

Deposits


In December 2015, the average balance of total retail deposits in Pesos reached Ps. 44,084

million, which represents 49% of the total. The composition mix between transactional deposits

and time deposits remained unchanged. As regards channels for raising time deposits, Online

Banking was the one that evolved the most, with a 105% growth and reaching an average

amount of Ps. 5,081 million at fiscal year-end.

Deposits in U.S. Dollars increased by 124%.

Personal Loans

The personal loans portfolio increased by Ps. 1,192 million during 2015. The development of

alternative channels continued being consolidated, especially within the Online Banking channel, as

well as the Branches, ATMs and Telephone channels. Eighty per cent of loans were automatically

granted within the sale channel.

Cards and Promotions

The credit and debit cards business continued growing strongly during 2015, with a 46% increase

in purchases, as compared to 2014, and over 200 million transactions during the year. Banco

Galicia’s share in the banking payment means market was 12.1%.

During the fiscal year, the Bank issued over 450,000 basic cards and 339,000 additional cards,

totaling 4.2 million cards. With 5,600 business agreements, the Bank grants benefits to its

customers at 12,000 stores of different industries throughout the country.

Additionally, a consumption amounting to Ps. 3,500 million was financed through the “AHORA

12” (NOW 12 Installments).

Quiero! Fidelity Program (I Want!)

Quiero!, the program of benefits that rewards customers for their relation with the Bank and the

use of bank products, was able to consolidate its position in its fifth year, and reached more than

840,000 customers subscribed by December 31, 2015.

Since its launch, the program achieved greater penetration in high-income customers, who

benefited from their higher cross-selling, balances and spending. For instance, it is worth

highlighting that, in High-Income and Private Banking segments, the program’s penetration

exceeds 80%. The penetration ratios and excellent acceptance, value and use indicators in the

Retail Banking income should be also highlighted, given the variety of benefits and the shorter

redemption times offered, as compared to other programs.

Apart from the customers’ recognition, market research by independent agencies confirmed again

that both our customers and those of our competitors are well acquainted with the Quiero!

program, and that it is considered the best program of benefits in the financial system. Customers

who have already made exchanges are even better acquainted with it.

The news that allows increasing satisfaction, scope and innovation includes the launch of

Outstanding Flights, a platform that allows customers to travel to selected destinations at a lower

cost. In addition, the post-purchase exchange was introduced, which enables to make a purchase

and then exchange points to get the benefit.


While Quiero! consolidated year after year as a value offer for customers, it also allowed Banco

Galicia to advance towards higher efficiency in the use of the investment in benefits, achieving a

lower impact on the income statement, and allocating resources to the customers from priority

segments based on the income recorded.

Digital

At Banco Galicia, about 90% of customers’ interactions (transactions and queries) take place

through digital devices, mainly Online Banking, to which 1,000,000 customers access quarterly.

This channel is supplemented with the Mobile application, which grew fast over the last two years

and currently concentrates 30% of customers’ accesses. In the near future, interactions are

expected to be moved from the PC to the mobile phone, given the spread of smart phones and the

projected evolution of the Galicia mobile application.

During 2015, digital channels grew by 14% in terms of number of customers and the increase in

transactions was even higher. An example is the foreign currency purchase and sale, where 95%

of transactions moved from branches to Online Banking, substantially improving the customer’s

experience and considerably reducing operating costs.

In 2015, Banco Galicia consolidated its digital environment strategy and developed an innovation

lab for the purpose of providing a cutting-edge service through these channels, where competition

increases more and more due to the trend towards digitalization and arising non-financial players

competing in different areas of the bank and financial environment.

Branch Network

Branches

During 2015, the focus was kept on continuing transforming the branch network into a space of

customers’ contact, development and creation of loyalty. At the same time, the concept of

customer’s experience continued being developed and the NPS methodology continued being

consolidated.

To achieve this, 64 branches were improved and modernized through image changes, partial and

full remodelings, furniture changes and wider lobbies, with a total investment of Ps. 140 million.

Additionally, the second Collections and Payments center was created in the city of Córdoba to

handle large cash volume transactions, creating a safe and dynamic environment both for

customers and employees. During 2016, these centers will continue being expanded, generating

collection and payment nodes.

The efficiency model at the branch network continued being developed, eliminating and

streamlining processes, with low added value to the customer and improving service time.

In order to continue streamlining sale processes and providing the customer with a better

experience, a series of improvements in the Bank’s CRM system were designed and developed.

A delivery system was implemented for additions of new cards, where the customer determines

the address of delivery, which allows improving the time of disposing them and the customer’s

experience.

More channels were developed and more hours were scheduled to facilitate customers’ self-

service. Cash deposits were optimized at smart self-service terminals (“TASI”, as per its initials in

Spanish), without cash caps during 24 hours.


The cash desk service was improved, reducing waiting times through different initiatives, such as,

the hiring of 32 cashiers under flexible work during the first 10 business days of each month.

Finally, satellite service models began being analyzed, with simpler branches that will be useful to

allow increasing the capillarity of our branch network through different formats.

Red Galicia 24 and Self-Service Terminals

Banco Galicia has one of the most extensive networks throughout the country. At the end of

2015, the Bank had 1,700 self-service pieces of equipment (860 ATMs and 840 self-service

terminals), distributed at branches, banks at work and other locations, such as gas stations,

hypermarkets and shopping malls.

The level of transactions grew by 5%, as compared to the previous year, and 110 million

transactions were channeled through ATMs and self-service terminals, whereas the average

amounts by withdrawal increased by 23%.

At fiscal year-end, smart terminals represented 80% of the total number of self-service terminals.

The main advantages of this new technology are online crediting, the convenience and extended

times to make deposits, the payment of cards, and the reduction in processing times and paper

use, since it is no longer necessary to use envelopes to make deposits and payments.

Insurance

In 2015, this business considerably developed, increasing both the offer of products and the

presence in different sale channels, which resulted in 520,000 new insurance policies and an

increase in income of more than Ps. 100 million, as compared to 2014. Accordingly, calm

continued being brought to Banco Galicia’s customers, with over 1.5 million property and personal

insurance policies.

New coverage, such as the Bike Insurance, additional to Home Insurance, was introduced. In

addition, multiple sale channels were added and products, such as the Unemployment Insurance,

were developed, whose 800% growth has raised the stock to 17,000 policies and Theft

Insurance, which doubled the portfolio, as compared to the previous period, primarily due to the

more than 100,000 new coverage purchased for Cellular Phones Insurance.

Individuals’ insurance products grew significantly as well, especially Family Protection Insurance

(Life), which already exceeded 50,000 current policies.

Banco Galicia thus consolidates its position as one of the leading banks having strong presence in

most risks.

Business Intelligence

During 2015, the Analytical Innovation area consolidated, whose mission is to observe trends,

analyze and implement new technologies. In this respect, the Real Time Decision (“RTD”) tool was

implemented in Online Banking, making the Bank become the first one in Latin America in having a

decision engine that allows making customized offers in real time to improve the customer’s

experience, increase sales and customer retention, and maximize income and increase

transactional deposits. To such end, the RTD tool takes information from more than 200 variables

to analyze in real time and determine what to offer to each customer and improve experience on

each channel.


In the second half of the year, our customers’ behavior and predictive models were developed to

know them better and help direct more effectively activation, cross-selling and attrition actions.

In terms of relational communication, there was a 36% growth, as compared to 2014, and the

effective contact levels increased by 32%.

Publicity and Image

In 2015, we worked hard on the brand’s top of mind, the position of priority segments and the

relaunch of the Quiero! Viajes program. Communication was given priority by developing simple

and important content messages through four systems: mass media, directed, social networks and

customer relation actions to achieve the maximum effectiveness.

At the creative level, Marcos, Claudia and the little Cata accompanied to tell with humor, clearly

and directly all the benefits, promotions and savings offered by Banco Galicia. Thanks to the

communication consistency kept, the advertising top of mind was achieved in the financial

institutions category and the Bank managed to be the top-of-mind brand during several months,

surpassing and going beyond the competition and several advertisers.

This was also reflected in the digital world, since a strong bet was placed on the channel,

relaunching the bancogalicia.com website, improving its use, with a simpler navigation as well,

with all contents in only one click made by the customer, more modern according to the latest

trends of the digital market and with more tools, such as the unified promotions search engine,

from which customers may inquire as to all the Bank’s promotions and know how to accumulate

them with Quiero! or request Account Services or Credit Cards 100% online.

The transactional sites were renamed: Galicia Home Banking as Online Banking and Galicia Office

as Office Banking.

Regarding the young people segment, MOVE allowed continuing working on the position, with a

digital media campaign thought exclusively for the target market. The results were sought

promptly since card sales goals on the digital channel surpassed.

In connection with Business and Pymes, customer relation actions were increased. Highly-valued

events and fairs in the industry allowed strengthening the relation as brand ambassadors. Buenos

Negocios (Good Businesses) became a milestone on the agenda of entrepreneurs and Pymes

businessmen nationwide, with high degree of satisfaction reflected in the NPS.

The Éminent position continued being developed within the high-income segment, communicating

sets of benefits tailor-made to each customer with a highly-valued contact policy.

We also worked on the Bank’s most visible face, the branches. The optimization of spaces and the

use of new supports were key to proposing image improvements and their communication. These

goals will continue during 2016.

We internally worked on the strategy and expression of the Bank’s purpose, a multidisciplinary

work that resulted in the design of a program to implement behaviors to be developed in 2016 and

that establishes the guidelines for what will come next year.

Consumption

Through its regional credit-card companies (Tarjeta Naranja S.A. and Tarjetas Cuyanas S.A.) and

Compañía Financiera Argentina, Banco Galicia offers financing for the consumption of low- and

medium-income customer segments.


Regional Credit Card Companies

Tarjeta Naranja S.A. and Tarjetas Cuyanas S.A. are the Bank’s subsidiaries through Tarjetas

Regionales S.A.

Average monthly statements issued amounted to 3.1 million, 6.0% above the previous year’s

average. Consumptions increased by 43.8%, up to Ps. 71,608 million, as a result of 148 million

purchase transactions, which represents a 5.5% increase, as compared to 2014 transactions.

Considering Argentine Central Bank’s last information available as of December 2015 about

financial and non-financial institutions, regional credit card companies had a 19.2% market share

in authorized cards and 13.8% market share in consumption, increasing by 0.5% as compared to

the first variable mentioned, whereas a 1.1% drop is noted in consumption, as compared to the

same month in the previous year.

In the branch network there were no significant variations in the number of service centers

although there were improvement and modernization changes. In the case of Tarjeta Naranja, the

corporate building in the city of Córdoba, called “Casa Naranja” (Orange House), of almost 15,000

m2 was opened. In the case of Tarjetas Cuyanas, two new branches were opened, one in the city

of Godoy Cruz (Mendoza) and the other one in Resistencia (Chaco). The companies have 297

service centers in the aggregate throughout the country.

In turn, the staff of Tarjeta Naranja and Tarjetas Cuyanas at fiscal year-end totaled 4,746

employees, a 4.5% decrease when compared to the previous fiscal year.

From the standpoint of the funding of transactions, priority was given to the issuance of

negotiable obligations, which entailed a lower cost and longer terms when compared to bank

loans, which allowed offering customers longer financing term plans.

In the commercial sphere, regional credit card companies’ mainstays for success continue being

closeness to the customer and store, quality in customer service and services. From the

advertising point of view, Tarjeta Naranja’s presence as official sponsor of Argentina’s National

Soccer Team in Copa América Chile 2015 stood out, even from the social and solidarity viewpoint

with the “Un gol, un potrero” (One Goal, One Soccer Field) program.

The growth in demand for magazines issued along with account statements continued during the

fiscal year. Accordingly, “Convivimos” and “Cima” exceeded one million subscribers, with a high

and increasing penetration in the total account statements.

Furthermore, new services were introduced into “Naranja Online”, such as the virtual branch,

where customers have new functionalities and designs. In addition, e-commerce websites

(www.tiendanaranja.com and www.preciosbajos.com), with increasing sales, in terms of

transactions and amounts, consolidated.

Tarjeta Naranja continued standing out as reference of the social networks sector, with more than

1,500,000 Facebook friends, while Tarjeta Nevada has over 200,000 Facebook friends. This is an

essential channel to provide customer services, chat with the community, share news, benefits

and promotional campaigns.

During the year, the LEAN methodology continued improving cost-efficiency, focused on the

ongoing optimization of processes, and enhancing the customer’s experience, thus ensuring the

quality of products and services.

http://www.tiendanaranja.com/

http://www.preciosbajos.com/


It should be also highlighted that Tarjeta Naranja was ranked fifth in Great Place to Work, among

the best companies with the best work environment in Argentina.

The credit portfolio managed reached Ps. 29,924 million at fiscal year-end, with a 50.2% increase

in the year. At the same time, arrears ratios, as a result of a successful credit risk and recovery

management, improved.

Tarjetas Regionales S.A.’s net income, in accordance with Argentine Central Bank’s accounting

standards, amounted to Ps. 1,531 million, increasing by 100.9%, as compared to Ps. 762 million

in fiscal year 2014, and keeping high ratios of return on capital and on assets that stood at 43.3%

and 8.5%, respectively, as compared to 29.2% and 5.3%, respectively, in the previous year.

Compañía Financiera Argentina - CFA

The company is a non-banking financial institution, regulated by the Argentine Central Bank, leader

in the consumer personal loans to low- and medium-income customer segment, and competes

with government- and privately-owned banks.

As of December 31, 2015, customers reached 454,000. The staff was made up of 1,158

employees and had 58 branches and 36 points of sale throughout the country. CFA’s net income

amounted to Ps. 127 million as of fiscal year-end, Ps. 14 million higher than that in 2014.

The net operating income for the fiscal year amounted to Ps. 1,444 million, an increase amounting

to Ps. 272 million, as compared to 2014, mainly due to the increase in the credit card portfolio.

The growth has been partially offset with the higher funding cost generated by the rise in

wholesale rates.

The provision for loan losses for the fiscal year amounted to Ps. 400 million, Ps. 30 million higher

than Ps. 370 million in 2014.

As of fiscal year-end, the loan portfolio, net of allowances for loan losses, amounted to Ps. 2,929

million, representing an increase of Ps. 203 million or 7.4%, as compared to the previous fiscal

year

The shareholders’ equity amounted to Ps. 1,250 million, Ps. 127 million higher than Ps. 1,123

million in 2014.

The company will continue concentrating its efforts on keeping the leadership position achieved in

the consumer loans market, adjusting its transactions to the new regulatory conditions, focusing

on increasing efficiency levels in transactions through operating processes reengineering,

consolidating “anchor” products (Credit Card and Benefit Account), which allow keeping the

business relationship with our customers beyond the settlement of the effective credit assistance

and thus cutting down granting and raising costs, and consolidating the funding strategy began

some years ago through the capital market share.

ninancia aivision

The Financial Division includes the Financial Operations, Banking Relations, Assets and Liabilities

Management, and Information Management and Support areas. Additionally, it takes part in the

FIMA mutual funds business, being the main distribution channel for this type of products.

The Financial Operations Division’s structure was changed during the last quarter of the fiscal

year: It was divided into the Commercial Division, whose main responsibility is the relation with


customers, and the Product Division, whose main responsibility is the development of financial

products.

Furthermore, the Public Sector Division, which was part of the Wholesale Banking Division,

became part of the Financial Banking Division.

Finally, the Assets and Liabilities Management Division became part of the Planning Division.

Financial Operations

The Financial Operations Division is responsible for, among other things, managing liquidity and

the different financial risks of Banco Galicia, based on the parameters determined by the Board of

Directors. It manages positions in foreign currency and government securities, and it also acts as

intermediary and distributes financial instruments for its own customers (institutional investors)

and corporate customers and individuals. It takes part in different markets in its capacity as

comprehensive clearing and settlement agent (Mercado Abierto Electrónico or “MAE”, Mercado a

Término de Rosario or “ROFEX”, and Mercado de Valores de Buenos Aires or “MERVAL”)

The volume traded in the foreign exchange market experienced a decrease as a result of foreign

exchange restrictions. Although on the wholesale market the total volume traded among banks on

the MAE decreased by 4%, as compared to 2014, from US$ 49,900 million to US$ 47,660

million, the volume traded by the Bank increased by 32%, from US$ 4,056 million in 2014 to US$

5,363 million in 2015, being in the fourth position of the ranking.

Regarding the futures market, Banco Galicia fell from the third to the fourth place in the MAE’s

ranking, and it was ranked second in ROFEX. In both markets, Banco Galicia traded a total volume

of US$ 14,995 million, 113% more than the US$ 7,026 traded in 2014.

The foreign trade volume transacted amounted to US$ 12,632 million, remaining at similar levels,

as compared to 2014.

In addition, U.S. Dollar trading transactions significantly increased as a result of loosening foreign

exchange restrictions, from US$ 600 million in 2014 to US$ 1,006 million in 2015.

The total volume traded in fixed income through the MAE was US$ 122,730 million. Banco Galicia

kept the first place in the annual ranking, with a 29% increase, as compared to the previous year,

reaching US$ 20,998 million traded and a 17.1% market share.

Banking Relations

The Banking Relations Division is responsible, at international level, for managing the Bank’s

business relationships with correspondent banks, international credit agencies, official credit banks

and, at domestic level, with banks, financial companies, exchange houses, and other entities that

carry out related activities.

As it happened in previous fiscal years, bilateral meetings were held with the most active

correspondent banks from abroad, through which the Bank channeled the different products and

services offered to its customers. The steady and adequate offer of credit lines in the

correspondent banking segment of the International Finance Corporation (“IFC”) and the Inter-

American Development Bank (“IDB”) helped us meet letters of credit and standby letters of credit

confirmation requests, as well as the financing needs related to customer export transactions. The

Mercosur, especially Brazil, continued holding a considerable share of the commercial activity,

followed by Southeast Asia (mainly China), the European Union, and to a lesser extent, the NAFTA

member countries.


Additionally, Banco Galicia continued strengthening relationships and analyzing the different

business opportunities with multilateral agencies and official credit banks, such as the IFC, the

IDB, the FMO, the Proparco, the National Economic and Social Development Bank (BNDES, as per

initials in Spanish), the Andean Development Corporation (CAF, as per its initials in Spanish) and

the Inter-American Investment Corporation (IIC), among others, with the purpose of broadening

the offer of mid- and long-term credit lines to finance sustainable investment projects and import

of capital goods, under the framework of Argentina’s economic openness.

At the domestic level, the Bank continued analyzing and identifying business opportunities, with

financial institutions, placing emphasis on being the most chosen brand, always within a

framework of reciprocity and long-term steady relationships.

Assets and Liabilities Management

The Assets and Liabilities Management Division is in charge of preparing and analyzing information

aimed at managing the mismatches inherent in banking activities, maintaining the exposure within

the policies determined by the Board of Directors.

The Bank’s activities include the provision of support to the Asset-Liability Committee (ALCO)

through the analysis and quantification of the risks associated with different business hypotheses

and market scenarios, as well as the follow-up of liquidity policies and currency mismatches,

whether due to regulations of the Argentine Central Bank or else Banco Galicia’s operations, and

the assessment of the Funding Unit’s results of operations through a transfer pricing method so as

to assess the profitability of each business unit, isolating them from the rate, term and currency

risk exposure.

Risk Management

The Risk Management Division is responsible for managing the Bank’s and the subsidiaries’ risks in

a comprehensive manner and follows international best practices. It is independent from other

business areas, since it reports directly to the Bank’s General Division. This approach goes along

with a high level of commitment from all the Bank's governance bodies, which strengthens the

idea of an independent management but, at the same time, involved in the business decisions and

oriented towards the risk profile, using state-of-the-art tools and systems for identifying,

measuring, monitoring and mitigating each and every risk faced by the Bank.

The mission of the Division comprises the following activities: (i) Actively and comprehensively

manage and monitor the risks taken by Banco Galicia and its subsidiaries, ensuring compliance

with internal policies and regulations in force; (ii) keep the Board of Directors totally abreast of the

risks that the Bank faces, proposing how to deal with them; (iii) help strengthen a risk

management culture that provides a global view of business, by fully understanding the risks

taken; (iv) design and suggest policies and procedures to mitigate and control risks; (v) quantify

the capital required by each business and recommend the General Division its allocation to the risk

taken and the profitability expected; and (vi) escalate dispensations from risk internal policies to

the Bank’s General Division, as appropriate, together with a compliance plan.

The Division’s responsibilities include: (i) Ensure contingency plans are in place for risks posing a

threat to business continuity; (ii) recommend the most suitable methodologies for the Bank to

measure identified risks; (iii) guarantee that the launching of any new product includes a previous

assessment of potential risks involved; and (iv) provide technical support and assist Management

Divisions in relation to global risk management.

This Management Division handles financial, operational, credit, reputational and strategic risks.


The Compliance Division, which reports to the Board of Directors, was created in 2014 and its

mission - applicable to the Bank, its affiliated companies and individuals - consists in monitoring

compliance with the laws, regulations and internal policies in order to prevent financial and/or

criminal penalties and minimize reputational impact. It is an independent role that coordinates and

assists in identifying, providing advice on, monitoring, reporting and warning about compliance

risks.

On the other hand, there is a division dealing with Prevention and Control of Money Laundering

and Funding of Terrorist Activities, which also reports to the Board of Directors, whose purpose is

to prevent the execution of financial operations with funds from illegal activities, and the use of

our bank as a vehicle for laundering money and funding terrorist activities.

Banco Galicia complies with all regulatory requirements set forth by Law No. 25246, as amended,

Resolution No. 121/2011, as amended, issued by the Financial Information Unit (“UIF”, as per its

initials in Spanish), and Argentine Central Bank’s Communiqué “A” 5218, as supplemented and

amended.

Banco Galicia has policies, procedures and control structures in place related to the features of the

various products offered, which help monitor transactions in order to identify unusual or suspicious

transactions and report them to the UIF. The Anti-Money Laundering Unit (“UAL”, as per its initials

in Spanish) is in charge of managing this risk, through the implementation of control and

prevention procedures as well as the communication thereof to the rest of the organization

through the drafting of the corresponding handbooks and the training of all employees.

Banco Galicia has appointed a Director responsible for the management of this risk, and has

created a Committee in charge of planning, coordinating and enforcing the compliance with the

policies set by the Board of Directors (see “Aspects related to Corporate Organization, Decision

Making, Internal Control, and Compensation Policy for Directors and Officers”). The basic principle

on which the regulations regarding prevention and control of money laundering are based is in line

with the “know your customer” policy in force worldwide. The management of this risk is regularly

reviewed by the internal and external audit.

Risk Management-related Governance Bodies

The bodies mentioned below are part of the internal control structure involved in terms of

definition, assessment and control of the risks taken by the Bank: Risk Management Committee,

Asset-Liability Committee (ALCO), Crisis Committee, Financial Committee – Consumer Banking,

Financial Risk Committee, Operational Risk Committee, Legal Risk Committee, Wholesale Credit

Risk Committee, Retail Credit Risk Committee, Consumer Financing and Health & Safety

Committee.

Credit

The Credit Division’s mission is to assure quality of loan portfolio through the origination of

businesses and the optimization of loan recovery strategies in accordance with standards of best

practices.

This Division performs the following functions: credit granting, preventive management, tracking

down and classification of customers, together with recovery of past-due loans.

In order to have timely information and a flexible and efficient structure that helps respond and

adjust to the current macro and microeconomic variables, the above-mentioned functions, both for

companies and for individuals, are under the charge of the Divisions that report directly to the

Area, thus looking for a more efficient decision-making process.


The Division has specific sectors for complex businesses: banks, capital market and agri-business.

In addition, there is an area for the review and analysis of sectors by activity and environmental

risk.

The analysis and granting in relation to the individuals portfolio are made on a centralized basis by

the Individuals Credit Approval Division.

Applications for these products, such as credit cards, checking account overdrafts and secured or

unsecured personal loans, are automatically assessed through automated credit scoring systems

that take into account different criteria to determine the customer’s credit background and

repayment capacity, as well as through granting guidelines based on the customer's credit history

within the financial system (which is verified against the information provided by a company that

furnishes credit information) or with Banco Galicia (credit screening).

Credit approval of corporate loan portfolio is carried out through two specialized teams: the

Corporate Credit Approval Division and the Credit Analysis Division.

Before approving a loan, Banco Galicia performs an assessment of the potential borrower and

his/her financial condition. Credits exceeding certain amounts are analyzed by credit line and

customer. For credits below certain amounts, the Bank uses automated risk assessment systems

that provide financial and non-financial information on the borrower, and that perform projections

on the financial statements and generate automatic warnings about situations that may indicate an

increase in the risk.

Banco Galicia performs its risk assessment based on the following factors:

Qualitative Analysis Assessment of the corporate borrower’s creditworthiness performed

by the officer in charge of the account based on personal knowledge.

Economic and Financial Risk Quantitative analysis of the borrower’s balance sheet amounts.

Economic Risk of the Sector Measurement of the general risk of the financial sector where the

borrower operates (based on internal and external statistical

information).

Environmental Risk Environmental impact analysis (required for all investment projects of

significant amounts).

Loans are approved by the Corporate Approval Division and Credit Risk Analysis Division, pursuant

to authorization levels, except loans exceeding certain amount and loans granted to (domestic or

foreign) financial institutions and to related customers; these loans are approved by the Credit

Committee.

The Strategy and Planning Division is in charge of the strategic vision of the area defining

efficiency ratios and action plans, proposing alternatives that contribute to the ongoing

improvement and ensure compliance with the goals set.

It is also responsible for ensuring the regulatory compliance, as established by regulatory agencies,

and reviewing and proposing changes to internal policies, both as regards credit granting and

preventive management and recovery of past-due loans. This area constantly interfaces with the

Risk Management Division.

The Customer Credit Recovery Division’s main role is to reduce the deterioration of the portfolio

under management and pursue customers’ reinsertion in the commercial line. It is also responsible

for the preventive management in charge of the primary reorganization of the Bank’s portfolio

through strategic models of behavior that help anticipate non-performing credit customers.


The Portfolio Recovery Division covers the court and out-of-court proceedings of customers within

the individuals and companies portfolio to maximize the portfolio recovery. In addition, it provides

advice on legal aspects to the Credit Division.

Comprehensive Corporate Services

There follows a description of the main activities carried out by the Divisions.

Organization

Banco Galicia remains on the way of transforming key processes started four years ago by

implementing the LEAN methodology, being a reference in its application within the region. During

the fiscal year, it continued expanding this methodology and adding new processes to those

already implemented in the Claim and Post-sale Management, Customer Contact Center (“CCC”),

Retail Loan Origination, Companies Loan Origination, Branches and Foreign Trade, implementing it

in the Purchases and Contracts process, in key Financial Area processes, in the Demand

Management process of the Organization and Systems areas, in the Technology area’s Help Desk

and the Anti-money-Laundering Unit. In addition, the LEAN project started in the Development and

Human Resources Area.

Additionally, the Bank continues making progress in the Process Monitoring practice, whereby the

people responsible for the business, together with different reference people, systematically follow

up customer-oriented indicators and carry out actions for their ongoing improvement.

Moreover, projects were developed, which boosted efficiency or generated new or higher capacity

to improve the service quality and increase income. They include the sale of products through the

Portal, Online Banking and CCC, the automation of the Stores’ Subscription to multiple card

brands, the centralization of Customer Retention and Closing of Products actions, a new

personalized and remote service model for Éminent Customers, the outsourcing of the Bank’s

documentation filing, including that kept at branches, and the implementation of new tools and

processes to improve the expense and investment management and the budgetary control.

Engineering and Maintenance

Eighty-seven per cent of the network’s image change plan was completed, which represented the

involvement of 64 branches.

Also, the branch located at Florida moved to Maipú 241, in order to improve the customers’

service and experience of one of the branches with the largest public traffic.

In relation to the Automated Banking Plan, 190 pieces of equipment were replaced, encouraging a

technology improvement in the total number installed, which will allow broadening the current

service provision.

As regards Grupo Financiero Galicia’s efficiency management and LEAN Purchases Project, the

pilot new model of branch maintenance was launched, which was carried out together with the

companies that are part of Grupo Financiero Galicia, achieving increased efficiency in costs and

improving services.

The contingency plan was applied to counteract the energy crisis, achieving an operating capacity

in hours of 99.89% of the total network.

As regards Galicia Square, a new sustainable corporate headquarters being built by the Bank in

Chacarita neighborhood in the City of Buenos Aires and that will house mainly operating sectors,


the reinforced concrete structure of the two towers and the glazing closure of the Leiva Tower

were completed. The Corrientes Tower began being closed and the installation works continue,

according to the planned schedule.

Management and Security

Moving forward with the resource management efficiency policy, during the year a transformation

program called LEAN Purchases started. The goal is to establish a standard supply methodology

for the whole organization, with clear roles and processes. To such end, the Strategic Supply

Division was created to facilitate attaining these goals. During the year, training courses were

given and 40% of the Bank’s total expenses, excluding Taxes and Compensation, was analyzed,

achieving savings amounting to Ps. 60 million. In 2016, the training and implementation of the

methodology will continue being strengthened, seeking to consolidate such division’s coordination

role within Grupo Financiero Galicia.

As regards the Branches’ security and based on the data obtained from reports and other banks, a

Map of Banking Crimes was drawn. This information allowed establishing the most exposed areas

and making decisions to give priority to putting security shutters at branches, allowing operating

after closing with more protection.

In October, the Bank’s Payments to Suppliers System and Fixed Assets Management System was

changed. The new system (SAP ERP) will allow controlling the traceability of the Bank’s outflow

processes, among other benefits.

Information Security

The Information Security Division carried out initiatives with a primarily customer-focused vision.

In this regard, work on different projects was performed, the most important of which are those

intended to ensure Online Banking and Office Banking operations, by introducing and expanding a

world-class tool that allows a simpler experience and improving the customers’ security, based on

their usual behavior on those channels. Also, other controls and technologies were introduced,

which protect the Bank’s technological infrastructure exposed to Internet.

Another project that should be highlighted was the migration of savings accounts to the new SAP

environment, performing different controls aimed at protecting the Bank’s information and

technological environment security.

Operations

The Operations Division’s management was focused on improving the customer’s experience, the

business performance and the efficiency of processes.

In connection with the main business projects developed, the CCC managed over 4 million

contacts, thus generating the placement of more than 15,000 personal loans. The Customer

Service doubled its percentage share of the total amount placed in the year.

Furthermore, the pilot Éminent Digital was launched, with advisors serving 4,000 customers to

meet their business or service needs.

During the year, at the Companies Loan Origination, 8,600 Credit Line for the Productive

Investment transactions amounting to Ps. 4,600 million were reviewed, documented and settled.

In addition, the Operations Division joined the Best Business Management, thus recognizing the

contribution to the customers’ satisfaction and experience, since 60% of the Division’s employees

interacts directly with them.


Continuing with the focus on efficiency, Retail Loan Origination increased by 21% in the year the

monthly average of folders processed. With respect to Clearing, the re-deposit system for illegible

checks was developed, thus avoiding the 24-hour delay in crediting to the customer’s account. In

addition, the Operations Division was focused on retail customers’ closing of products process.

As regards the Foreign Trade service, the Operations Division was rewarded for its payment

quality, the facilitation of trade financing and operational excellence by entities, such as the IDB,

Standard Chartered, Wells Fargo and Commerzbank. Also, Banco Galicia achieved the second

position in the market for the volume transacted in U.S. Dollars in imports and exports, and

continued being one of the top-of-mind banks chosen by customers.

Systems

The Systems Division was focused on the project to change the banking core system, reaching

this year the final instances of its implementation. The development of the functionality of

checking accounts was completed in December, only remaining the effective migration thereof for

2016. Likewise, it began with the introduction of Individuals portfolio loans, starting with those

granted through Online Banking and Banelco. Thus, after migrating checking accounts during

2016, the project will be completed.

The use of technology to analyze SAP HANA information was extended, making available to

customers through Online Banking the possibility of consulting the necessary information to

prepare its income tax returns and the unified view of the benefits granted by the Bank in its

different loyalty creation programs.

The first of a series of implementations about the tool to analyze Real Time Decision (“RTD”)

information was carried out, which allows making directed promotions or proposals according to

different business criteria, personalized by customer or by segment, which will allow substantially

improving the acceptance ratio of offers.

A facility was developed to allow the exchange of Quiero! points after the purchase date, thus

allowing customers to take advantage of the Bank’s promotions although they do not know them

at the moment they carry out the purchase.

Organizational Development and Human Resources

Being one of the best companies to work for is one of Banco Galicia’s strategic mainstays. This

entails a commitment and sustainable vision in people management, seeking to attract the best

market talents and make them loyal. In this line, the changes implemented in people management

provided a sound platform to leverage compliance with the strategy the Bank set for the coming

five years, strengthening the organizational culture.

Year 2015 began with the 2015-2020 Strategy, which includes the business model of the

Customer’s Experience. Aligned with this new strategy, an organizational redesign was made in

order to generate possibilities for the development of managerial positions selecting the best talent

for key positions. The new structure of the Area Managers Committee arose from a selection

process that encourages and promotes the internal talent.

The Organizational Culture Plan also began being executed focused on the challenges defined as

priority: To define and communicate the leader model as main agent in the culture management

sustainability, aligning talent management policies and practices, reviewing the model of

organizational values and purpose, and strengthening the work environment management. These


cultural priorities are critical to strengthen and support the customer’s experience business model

based on the employee’s experience.

The ongoing Management of work environment is a key driver to achieve it. As evidence of the

result of the work performed by the whole organization for the sake of carrying out the best and

most innovative Human Resources practices, in the last survey of work environment the Bank

obtained a general average of 79%, achieving the fourth position of the Great Place to Work

ranking of the best companies to work for in Argentina.

Internal Communication

In 2015, the work on our strategic mainstays continued to go on building a simple, efficient,

innovative and multichannel communication to strengthen the organizational culture through the

Internal Communication.

The “Conociéndonos cada día más” (Getting to Know Each Other More Every Day) program is the

space that provides a close experience among employees, area managers and the Chief Executive

Officer, and more than 3,500 employees have taken part therein for five years in a row. The tour

of meetings with the branch network was made in 2015. More than 30 meetings were held

throughout the country.

Banco al Día (Up-to-Date Bank) is the channel whereby the Chief Executive Officer monthly shares

the matters relevant to the organization’s strategic vision. The synergy with different companies of

Grupo Financiero was added in 2015. The first experience was with Galicia Seguros upon editing

Banco al Día at its headquarters.

Líder al Día (Up-to-Date Leader) also consolidated this year as the most valued channel, continuing

with the goal of ensuring that leaders receive key information for their management and that of

their teams, which increases its role as communicators as well.

Change Management

In the Change Management area, the work comprised three focal points: project portfolio,

synergies and initiatives.

As regards project portfolio, 56 projects were managed and the Integrated Impact Vision was

developed for the purpose of measuring the additional dedication required from employees of all

the Bank’s areas due to the changes introduced from different projects, a map that allows giving

visibility upon making decisions on actions that have an impact on different audiences. In addition,

the results and comments of the work environment survey conducted of the audiences impacted

by the different projects were analyzed, understanding them as material variables upon defining

the adequate change plan.

Under the synergy focal point, the activities related to integrating the processes that are shared

with strategic partners, focused on generating better results upon undertaking actions, were

continued. Exchanges with companies of Grupo Financiero and companies from other industries,

workshops with employees were held, and integrated shared management processes were

generated.

Additionally, the Knowledge Management team joined the Change Management Department. This

team’s purpose is to provide support to businesses to expedite employees’ learning through the

collective knowledge management, including safeguarding key information, its consultation and

view, and the internal structure to support the whole Bank.


+Beneficios (+Benefits)

Designed to care for, support and honor employees both in the work environment and in all their

personal projects, the Bank’s benefits program gathers the best market practices and is aimed at

all ages and geographic areas with benefits specially thought to provide each employee with the

best experience.

In connection with care and encouragement of healthy habits, in 2015 the activities were focused

on how to prevent and cope with stress, holding conferences and workshops about prevention

tools for employees and their families.

Programs related to flexible work time, birthdays, mothers’ gradual return to work and the creation

of spaces that allow integrating the employees’ families with different actions, such as,

celebration of the family day, children’s day, family visit on Christmas, teachers’ day, private

movie theater, theater performance, etc., were consolidated.

Each employee was also provided with assistance to meet the new tax requirements through

workshops, tutorial videos and personalized professional tax and legal assistance.

Employees throughout the country were integrated through events, such as, after-office meetings,

sports competitions and cultural events.

In addition, employees had the possibility of choosing some benefits, according to their needs,

such as, birthday gifts, the school kit for their children, exclusive discounts, special agreements

and purchase of products at special prices, all these by introducing new technologies that allow

easy access.

Innovation Program

In 2015, we continued developing the Bank’s innovative capacity. The program based its actions

on three mainstays:

- Development of the Innovate Skill: Through different training actions, over 990 employees

acquired innovation methodology tools, which allowed them to be more innovative in their daily

tasks. Furthermore, the Innovation Day was celebrated, where over 300 employees throughout the

country took part and more than 25 reports were generated regarding the Customer’s Experience,

directly helping with the design of this new area’s strategy.

- Expert Referents’ Training: A new generation of Innovation Drivers joined the program. A group

of 26 employees from different areas and hierarchies who were provided with tools to become

referents and experts of the methodology.

- Consolidation of the Proceso de Innovación Galicia (“PIG”, as per its initials in Spanish) (Galicia

Innovation Process): We used the PIG to manage 5 projects from different areas that engaged 54

employees.

All these initiatives and those carried out over the last three years involved 40% of the Bank’s

employees, with 93 initiatives implemented and more than 10 being implemented.

This year the Galicia Lab was also opened, which is focused on fully working on digital

innovations, and a new innovation space.

Jobs

During 2015, 18 young professionals were hired for different central areas and 65 at branches

with Éminent, and Business and PyMEs profile, continuing with the recruiting process through

social networks and referrals.


The Bank continued taking part in job fairs to consolidate the Employing Brand, 3 Web-based fairs

and 6 face-to-face fairs at different universities.

The call for the “Experiencia Galicia” (Galicia’s Experience) Program was made through social

networks, Banco Galicia’s website and universities with which we have internship agreements.

Moreover, two mass recruiting days were organized, where the Bank received 320 young students

from the City of Buenos Aires and Greater Buenos Aires.

Training

In line with the Bank’s strategy and performance goals, a series of training courses were offered to

allow a better performance of duties. The most important ones are as follows:

- Under the framework of the Experiencia Galicia Program, a summer job practice for young

university students, different training activities were carried out for over 100 young people

throughout the country, including proposals that, from play and practice, allowed training interns

in their duties at branches.

- To improve insurance knowledge, and its marketing skills, the Insurance Trainers Program was

held, which consisted in training an employee from each branch, who will be responsible for

training the members of his/her branch, in addition to becoming a reference in the issue.

- By mid-2015, the Bank implemented a new Digital Service Model for the Éminent segment, for

which it designed the Digital Éminent School, a training program that develops competencies to

improve the customer relation experience with technologies aligned with the new market

demands.

- To achieve a better customer input and reduce waiting times at branches, 32 Flex Cashiers were

hired, who work the first 10 business days of each month, for which a tailor-made training

schedule was designed.

- To boost the implementation of LEAN in the Bank’s different areas, online courses and face-to-

face workshops were designed.

- As part of the Customer’s Day program, the whole Community of Leaders was invited to take

part in the “Conociendo Nuestros Procesos” (Understanding our Processes) experience, whose

purpose is to understand the organization from a process view, based on a walk-through by stage,

generating a full vision that allows detecting improvement opportunities that add value to the

Customer’s Experience.

Development

The focus continued on the Potential Calibration to promote a cross view and ensure equity criteria

considering different variables that describe the potential for the Bank. The organization’s Talent

Mapping was obtained from these committees, which provides material information to carry out

different actions. This year, for the first time, a total of 1,200 branch profiles were calibrated,

which allowed having an immediate comprehensive view of the network talents.

Under the framework of the Performance Assessment process, the cycle was changed from

October to September as from 2015. This change allows facilitating the goal setting and

evaluation process and making it more efficient since it is performed simultaneously with the

annual budget.

This year the new Galicia’s competencies model was presented. Eleven new competencies were

defined, which are characterized by being challenging and inherent to our culture aspirations.

The PeopleNet tool was introduced as innovation in Oportunidades Galicia (Galicia Opportunities)

to facilitate both the management of internal job postings and the employee’s experience in the

process.


In 2015, the second edition of the TEDxGalicia event was carried out, in which 6 internal and 3

external speakers participated.

During the year, 71 grants were given and 19 employees who received grants in previous years

continue with their programs.

Quality Assurance

During 2015, the customer’s experience continued being spread throughout the organization,

leveraged by the results of several satisfaction surveys in all the segments, and through the

enlargement of the NPS methodology for the service of Éminent, Business and Pymes, and PyMEs

Pes (small-sized companies) segments in the branch network, deploying its application to the

Wholesale and Financial Banking and at the CCC.

The NPS methodology allowed being closer to customers over the last four years, listening to and

understanding their needs to be able to provide them with the experience they expect from the

Bank.

In the second half of the year, studies were conducted to assess the satisfaction and

recommendation level of customers from the different segments regarding the banks with which

they operate. Extraordinary results were obtained from these studies. Banco Galicia was ranked

first considering the NPS, with significant difference with respect to the second one in the cases

of High-Income, Agricultural, Business and PyMEs and Financial Banking, and shared in the cases

of Corporate and Middle-market, whereas Massive Income was ranked second. This achievement

was built with the commitment and conviction of all the employees who adjusted processes,

products and service models and achieved that customers notice and perceive it, understanding

that each one’s daily work has impact on the customers’ experience and requires everyone to

continue improving it day after day.

To make the entire organization’s customer-oriented approach stronger, in 2015 the number of

divisions that have NPS as KPI (Key Performance Indicator) was broadened, leveraging by

indicators the whole institution’s work on improving the customer’s experience.

Regarding the employee’s experience concept, the Internal Customer Program continued assessing

the NPS and the satisfaction level of the Bank’s employees with the internal services received.

Once more, the central departments assessed were broadened and the goal to raise the degree of

commitment to service was increased. This assessment allows identifying opportunities for

improvement in internal processes that eventually have an impact on customer service.

The spreading of the “Pasión por el Cliente” (Passion for the Customer) program also continued,

with three forums in which middle management and the rest of the organization took part. These

meetings are intended to raise awareness, modify habits and spread the customer-oriented

philosophy throughout the organization.

In 2015, Galicia Warrants’ and Galicia Administradora de Fondos’ processes certified in previous

years under ISO 9001 were revalidated. Each of these certifications has a customer satisfaction

survey, which allows knowing their service input and managing improvements. The certification is

the procedure whereby an authorized certifying entity assures in writing that a given company’s

product, process or service meets the requirements specified in an international standard, ISO

9001 being the most renowned.

The Bank maintained its adherence to the Code of Banking Practices, an initiative fostered by

several Argentine Bank Associations, with the purpose of contributing to guaranteeing the rights

of users of financial services and products. It further tries to guarantee the transparency in the

data provided by financial institutions to their customers, and the bonds between the institutions


that provide financial services and the community those institutions belong to. Banco Galicia also

maintained its membership in the Fundación Empresaria para la Calidad y la Excelencia (FUNDECE -

Business Foundation for Quality and Excellence), an institution that fostered the creation of the

Premio Nacional a la Calidad (National Award to Quality), which annually recognizes the best

companies in the country.

By year-end, the Bank decided to change its structure and replace the Quality Assurance Division,

creating the Customer’s Experience Division. This important strategic decision is aimed at

achieving the position as the best Universal Bank in Argentina with customers who have

expectations exceeded and recommend the bank’s service, and employees are increasingly

satisfied and proud of working at Galicia. The area’s challenges are to build, along with all the

Bank’s sectors, a customer-oriented culture, to lead priority and cross-section projects to improve

the Customer’s Experience, to design and manage a sound and integrated ongoing improvement

system, to lead the learning cycle to share the best practices and support the ongoing

improvement cycle with NPS, LEAN and Innovation methodologies.

Corporate Social Responsibility

Banco Galicia conceives sustainability as critical contents of the business strategy. Therefore,

work is performed to reconcile positive economic results and, at the same time, the responsibility

for efficiently managing the social and environmental impact caused by its operations is assumed.

This business vision is shared with all the companies that are part of Grupo Financiero Galicia,

performing sustainable development work jointly.

Through social investment programs, the Bank conducts activities to strengthen and improve

upper education quality, expanded opportunities to undertake and innovate through training and

providing decent employment opportunities, and contributed with public health institutions, along

with the local health agents’ training, to child malnutrition prevention. These initiatives of relation

with the community translate into facts and results that are annually communicated to customers,

shareholders, suppliers, employees and the whole community.

Banco Galicia drives an integrated environmental management strategy that contemplates an

efficient use of natural resources, focusing on the rational consumption of electric power and

paper. In addition, it calculates its corporate carbon footprint, carries out awareness initiatives and

environmental preservation and grants credit lines that favor the minimization of the impact on the

environment. Moreover, it has a special Mezzofinanzas line to finance sustainable and innovative

undertakings and projects, with a high social and environmental impact.

The Bank also revalues its employees’ solidarity initiatives by means of the Corporate Volunteering

Program through infrastructure and equipment improvement projects for the benefit of public non-

profit organizations.

Under this framework of action, an integrated communication strategy began, jointly with the main

companies of Grupo Financiero Galicia through the Sustainability Report. By means of this

publication the different companies’ economic, social and environmental results are made known.

The Report is prepared following different international guidelines, such as, the IBASE Social

Balance Sheet, the AA1000SES Accountability Standard, ISO 26000 Standard on Social

Responsibility, the ten principles of the Global Compact and the G4 Global Reporting Initiative

(“GRI”) Guidelines and its Financial Supplement. Additionally, the 17 Sustainable Development

Goals will be contemplated, an integrated set of worldwide sustainable priorities by 2030,

launched at the 2015 United Nations Summit.

These initiatives conclude on the sustainable view of the business Banco Galicia undertakes along

with its commitment as social player. In addition, the definition of a coordinated strategy for the


joint work with companies of Grupo Financiero Galicia will allow identifying and strengthening

actions and aspects related to the sustainable management for companies and their stakeholders.

Sudamericana Holding

Grupo Financiero Galicia holds 87.5% of the company’s capital stock and Banco Galicia owns the

remaining 12.5%.

This investment in the insurance business is part of Grupo Financiero Galicia’s general plan to

strengthen its position as leader in providing financial services.

In turn, Sudamericana Holding is the controlling company of Galicia Seguros S.A. (property and life

insurance), Galicia Retiro Compañía de Seguros S.A. (retirement insurance) and Galicia Broker

Asesores de Seguros S.A. (insurance broker). Additionally, Sudamericana Holding currently holds

35% (indirectly) of Nova Re Compañía Argentina de Reaseguros S.A. (local reinsurer).

Total insurance production of the aforementioned insurance companies amounted to Ps. 2,547

million during 2015, 44% higher than the volume of premiums of the previous year.

This increase in insurance production was recorded mainly for Galicia Seguros, with Ps. 782

million more premiums written than in the same period of the previous fiscal year. As regards

Galicia Seguros’ business transactions, the focus was placed on continuing to increase the

company’s turnover and sales, which in 2015 amounted to Ps. 709 million of annualized

premiums. This represented a 39% growth when compared to the previous year, thus increasing

the insurance policy laps ratio and extending the types of coverage offered.

Galicia Retiro Compañía de Seguros continues with an action plan aimed at effectively

administering the current business and keeping a proactive analysis on the evolution of market

conditions in order to assess whether to re-launch the sales of voluntary retirement products, both

individual and group.

Galicia Seguros will continue the vertical growth of business through Banco Galicia and regional

credit card companies, as well as the development of the existing alternative sales channels by

means of the launching of new products and the use of new points of contact and sales, and the

analysis of feasibility of underwriting insurance in new property insurance lines in order to mitigate

companies’ risks. Additionally, it will continue maintaining its goals of: (i) boosting the business

with products supplementary to the core business of Banco Galicia and its subsidiaries, adjusted to

each of their segments; (ii) expanding the sale of insurance to companies; (iii) make management

effective to support the growth of the business volume, implementing the update of the

management system (Visual Time); (iv) consolidating the insurance position for individuals, taking

advantage of the synergies with Grupo Galicia and developing the over-the-counter market and

additional channels; (v) keeping the efforts to restrict the level of expenses and obtaining the

estimated profitability; and (vi) fostering a very good work environment and be eligible as an

excellent company to work for by the staff .

Galicia Broker Asesores de Seguros will continue focusing on and boosting its growth in the area

of business related to the corporate sector, offering its customers professional advisory services

that will allow them to find the most appropriate insurance and companies in each case, in order

to contribute to the main goal of growing with appropriate profitability levels. On the other hand,

the company will continue moving forward so as to maintain operating systems updated to

continue gaining ground as regards efficiency and in developing systems that allow online

interaction with sales channels, streamlining the carrying out of new businesses, easing the

monitoring of transactions and providing management information.


Galicia Administradora de Fondos

Galicia Administradora de Fondos’ shareholders are Grupo Financiero Galicia, which holds 95% of

shares and Galicia Valores S.A., Banco Galicia’s subsidiary, which holds the remaining 5%.

GAF manages FIMA mutual funds. Banco Galicia distributes the mutual funds to several customer

segments (institutional, corporate and natural persons) through its broad distribution channel

network (branches, e-banking, telephone banking), while it acts as a custodian of the assets that

make up the funds, in its role as custodial agent of collective investment products corresponding

to mutual funds. Furthermore, this company manages investments and determines the market

value of mutual fund units on a daily basis.

The assets of mutual funds are invested in a variety of instruments, such as bonds, negotiable

obligations, trusts, shares, time deposits, among others, according to the investment purpose of

each mutual fund.

FIMA funds equity increased by 53% when compared to the close of the previous fiscal year,

reaching, as of December 31, 2015, a volume of funds managed of Ps. 18,174 million, which

accounts for a 9% market share, thus keeping its share as compared to the previous year. This

increase in volume mainly took place in the institutional and corporate customers segments, and in

FIMA Ahorro Pesos, FIMA Ahorro Plus and FIMA Premium.

Under the framework of the amendment to GAF’s bylaws, which removed the limitation on the

only purpose, allowing the company to be able to carry out other activities, such as the portfolio

management, the company currently has three new regulations approved, Fima Premium Plus,

Fima Gestión I and Fima Mix I, in view of a possible demand for 2016.

In fiscal year 2015, GAF optimized the financial performance of its liquid assets, making

placements in its own FIMA mutual funds that it manages.

As regards credit ratings, Moody’s Latin America Calificadora de Riesgo S.A. granted the FIMA

funds the following ratings: FIMA Premium “Aaa”, FIMA Ahorro Pesos “Aa”, FIMA Ahorro Plus

“Aa”, FIMA Renta Pesos “A”, FIMA Renta Plus “A”, FIMA Capital Plus “A”, FIMA Pymes “A” and

FIMA PB Acciones “Ef-3”.

The outlook for 2016 foresees an ongoing increase in mutual funds and the development of

business related to that activity within the framework of the new Capital Markets Law, such as

advisory services and management of discretional investment portfolios.

Galicia Warrants S.A.

Its shareholders are Grupo Financiero Galicia, with an 87.5% stake in this company, and Banco

Galicia, with the remaining 12.5%

This is a leading company in the industry of certificates of deposit and warrants. This company

has been conducting transactions since 1994, supporting medium and large companies in regard

to the custody of stocks. Its main purpose is to enable its customers access to credit and

financing, which are secured by the property kept under custody. Galicia Warrants S.A.’s main

customers belong to the agricultural, industrial and agro-industrial sectors, as well as exporters

and retailers.


The volume of operations for 2015 was higher than that for 2014, which entailed a 90% increase

in income from services, as a result of the increase in the customer portfolio and the volumes of

goods under custody. The sectors that demanded this financial instrument the most were regional

economies, mainly those related to agriculture and agroindustry.

Income from services for the fiscal year reached Ps. 81.4 million, whereas net income amounted

to Ps. 31.3 million.

The Company will continue focusing on providing customers with the best service, tailoring it to

their needs. This will enable a sustained growth and an expectation about a more aggressive

development for the coming years.

Net Investment S.A.

Grupo Financiero Galicia owns an 87.5% stake in Net Investment S.A., while the remaining

12.5% stake is held by Banco Galicia. Net Investment was created to carry out Internet business

transactions. Within the framework of the Board of Directors’ search for new business

alternatives, the shareholders decided to amend the corporate purpose to be able to have an

interest in other companies that carry out related, accessory and/or else supplementary activities.

The outlook for 2016 is related to the possibility of carrying out the business alternatives and

opportunities that are being analyzed by the Board of Directors.


Aspects related to Corporate Organization, Decision Making, Internal Control, and


Composition and Functions of the Board of Directors

The Ordinary and Extraordinary Shareholders’ Meeting held on April 29, 2015, fixed the number of

directors in nine and in four the number of alternate directors.

The composition of the Board of Directors is as follows:

Name Position Expiration of Term

Eduardo J. Escasany Chairman 04/15/2016

Pablo Gutiérrez Vice-Chairman 04/15/2016

Abel Ayerza Director 04/29/2018

Federico Braun, Engineer Director 04/29/2017

Enrique Martin, Accountant Director 04/29/2018

Luis O. Oddone, Accountant Director 04/15/2016

Silvestre Vila Moret Director 04/29/2017

Antonio R. Garcés, Accountant Director 04/29/2018

Juan Miguel Cuattromo (1) Director 04/29/2016

María O. Hordeñana de Escasany (2) Alternate Director 04/29/2017

Sergio Grinenco Alternate Director 04/29/2018

Alejandro M. Rojas Lagarde Alternate Director 04/29/2018

Augusto Rodolfo Zapiola Macnab Alternate Director 04/29/2018

(1) The Director resigned to his position as from September 7, 2015.

(2) Passed away on September 18, 2015.

The Board of Directors meets formally once a month and each time circumstances so require it. It

is responsible for the establishment of general guidelines related to asset and liability management,

the approval of business plans, economic and financial budgets, investment plans, and proposals

for development of new businesses.

Corporate Organization

Grupo Financiero Galicia is directed by two management divisions.

GENERAL DIVISION: Its main function consists in implementing the policies defined by Grupo

Financiero Galicia’s Board of Directors, as well as suggesting to the Board of Directors the

application of plans, budgets and company organization. This division is also in charge of

supervising the Financial & Accounting Division, assessing the attainment of goals and the

performance of the company. It as well takes part in the Board of Directors of subsidiaries.

FINANCIAL AND ACCOUNTING DIVISION: It is mainly responsible for the assessment of

investment alternatives, thus suggesting whether to invest or divest holdings in different

companies or businesses. It also plans and coordinates the company’s administrative services and

financial resources in order to guarantee its proper management. This division also aims at meeting

requirements set by several controlling authorities, complying with information and internal control

needs and budgeting purposes. Furthermore, it is in charge of planning, preparing, coordinating,

controlling and providing financial information to the stock exchanges where the Company’s

shares are listed and to regulatory bodies.

This division also has the following committees:


DISCLOSURE COMMITTEE: This Committee is made up of Grupo Financiero Galicia’s Managing

Director, the Chief Financial and Accounting Officer and two supervisors from the Financial and

Accounting Division. At least one of the members of this Committee takes part in the meetings

held by the "Disclosure Committee", created for the same purposes at the main subsidiaries.

Among others, it has the authority to invite the executives in charge of other areas of the

Company and/ or affiliated companies, as it deems convenient, to attend the meetings held by the

Committee. This Committee was created in 2002 with the purpose of complying with what is

recommended by the Sarbanes-Oxley Act of 2002 of the United States of America, since Grupo

Financiero Galicia is a listed company on the NASDAQ Capital Market. The above-referred Law

was passed in order to provide a more stringent regulatory framework regarding information and

corporate responsibilities, both for companies in the United States of America as well as foreign

companies that act or participate in U.S. markets. Among its responsibilities, the following stand

out: monitoring the Company’s internal control, reviewing the financial statements and other

information published, preparing the reports for the Board of Directors on the activities carried out

by the Committee, controlling the activities performed by internal audit, executing and

implementing the necessary measures to comply with the certifications required by Sections 906,

302 and 404 provided by the Sarbanes-Oxley Act, monitoring the modifications introduced in

order to extend the application of the provisions of the Sarbanes-Oxley Act to the Company’s main

affiliated companies, and interacting with the Company’s Audit Committee. It is worth noting that

this Committee's operations have been adapted to comply with domestic laws currently

represented by Capital Markets Law No. 26831 and regulations issued by the CNV, so as to be

able to help with tasks that are regulated by such laws. At present, this Committee performs

significant activities on the administrative and information areas that serve the Board of Directors

and the Company’s Audit Committee in the development of their functions. This way, the

Company contributes to the transparency of information provided to the stock exchanges where

its shares are listed.

AUDIT COMMITTEE: This Committee was created as a body with no executive functions, which

purpose is to provide the Company’s Board of Directors with assistance in overseeing the financial

statements, as well as in the task of controlling Grupo Financiero Galicia and its subsidiaries and

companies it owns a stake in. This Committee complies with the provisions set forth by Capital

Markets Law No. 26831 and regulations issued by the CNV, which require that companies that

make a public offering of shares should form an Audit Committee, and develop a charter with

regulations for its operation. Furthermore, it is worth noting this Committee has been created in

compliance with the requirements of the Sarbanes-Oxley Act. Among the activities it carries out,

the following are worth noting: the annual planning of the Committee’s activities and the

allocation of means for its operation; the evaluation on the independence, working plans and

performance of External Audit and the assessment of plans and performance of Internal Audit;

evaluation of the internal control in force at the Company (which, furthermore, complies with the

provisions of Section 404 of the Sarbanes-Oxley Act) and at its main subsidiaries, and, as part of

that, the accounting and administrative system’s operation; the assessment on the use of

information policies on risk management at the Company’s main subsidiaries; assessment on the

reliability of financial information submitted to the regulators and markets where the Company lists

its shares; evaluation of standards of conduct through the analysis of legal and regulatory

provisions being in force and set forth in the Code of Ethics established by the Company, mainly

with regard to transparency, conflict of interests, reliability and the appropriate disclosure of

accounting information and other significant events, as well as the protection of the Company’s

net worth; the analysis of related party transactions for the cases established by Capital Markets

Law No. 26831; and the analysis of whether conditions are reasonable and of compliance with the

General Program for the Issuance of Negotiable Obligations outstanding.

Supervisory Syndics’ Committee

In line with what is set forth in the General Corporations Law, corporate bylaws provide for a

Supervisory Syndics' Committee consisting of three regular members (syndics) and three alternate


members (alternate syndics). In accordance with the applicable Argentine law, the Supervisory

Syndics' Committee is responsible for controlling the Company's management, for which its

members examine books and documentation when they deem it convenient and at least every

three months. At least one of the members attends the meetings of the Board of Directors. Unlike

directors, syndics and alternate syndics cannot have management functions. The syndics are

responsible for, among other things, preparation of a report to shareholders analyzing the

Company’s financial statements and Annual Report for each fiscal year.

Alternate syndics act in the temporary or permanent absence of a syndic. The syndics and the

alternate syndics are elected for a one-year term by the shareholders at their Annual General

Meeting.


The policy for compensation applied by Grupo Financiero Galicia and its controlled companies is,

essentially, the same, and it consists in arranging salary levels in order of importance based on a

system that describes and assesses tasks by factors (Hay System). The purpose is to pay

compensation amounts similar to those observed in the domestic market for functions with the

same hierarchy and responsibilities. Managers receive a fixed compensation and may receive a

variable fee based on individual performance. This policy for compensation envisages the

possibility of having access to retirement insurance and there are no option plans.

Directors earn fees based on the tasks performed, in accordance with effective regulations and

have the Audit Committee’s opinion on the reasonableness of the fees paid in the market.

Compensation for the members of the Board of Directors shall be considered by the Shareholders’

Meeting once the fiscal year has ended.

Policy on Dividends

Grupo Financiero Galicia’s policy for the distribution of dividends envisages the following, among

other factors: (i) the obligatory nature of establishing a legal reserve, (ii) the company’s financial

condition and its indebtedness, (iii) the requirements of controlled companies, and (iv) that the

profits recorded in the financial statements are realized and liquid profits, a requirement of Section

68 of the General Corporations Law so that it is possible to distribute them as dividends. The

proposal to distribute dividends arising from such analysis has to be approved at the Shareholders'

Meeting that discusses the Financial Statements corresponding to each fiscal year.

Composition and nunctions of Banco Ga icia’s Board of airectors

The Ordinary and Extraordinary Shareholders’ Meeting held on April 29, 2015, fixed the number of

directors in seven and in four the number of alternate directors.

The composition of the Board of Directors is as follows:

Name Position Expiration of Term

Sergio Grinenco Chairman 12/31/2017

Pablo Gutiérrez Vice-Chairman 12/31/2017

Guillermo J. Pando Secretary Director 12/31/2017

Luis M. Ribaya (3) Director 12/31/2016

Raúl H. Seoane Director 12/31/2016

Pablo M. Garat (1) Director 12/31/2015

Ignacio A. González (1) Director 12/31/2015


Enrique García Pinto (2) Alternate Director 12/31/2017

Cirilo E. Martin Alternate Director 12/31/2017

Augusto R. Zapiola Macnab Alternate Director 12/31/2015

Oscar J. Falleroni (3) Alternate Director 12/31/2015

(1) In accordance with National Securities Commission (CNV) regulations, and pursuant to the criteria adopted by said

entity, Messrs. Pablo M. Garat and Ignacio A. González are Independent Directors. (2) In accordance with CNV regulations, and pursuant to the criteria adopted by the CNV, Mr. Enrique García Pinto is

Independent Alternate Director. He shall replace the Independent Directors in the case of a vacancy.

(3) It is evidenced that Mr. Luis M. Ribaya resigned to his position on December 18, 2015 and Oscar J. Falleroni,

Accountant, resigned to his position on January 19, 2016.

The Board of Directors formally meets at least twice a week and informally every day, is in charge

of Banco Galicia's general management and takes all the necessary decisions to fulfill said task.

Members of the Bank’s Board of Directors also serve in the following committees:

RISK MANAGEMENT COMMITTEE: This Committee is composed of five Directors, the Chief

Executive Officer, the Managers of the Risk Management Division and Planning Division and the

Internal Audit Manager. It is in charge of approving risk management strategies, policies,

processes and procedures, with the related contingency plans, establishing the specific limits for

each risk exposure and approving, when appropriate, the temporary limit excesses and becoming

aware of each risk position and compliance with policies. The Committee meets at least once

every two months. Its resolutions are summarized in writing in minutes.

CREDIT COMMITTEE: This Committee is composed of seven Directors, the Chief Executive Officer

and the Managers of the Credit and Risk Management Divisions. The Managers of the Wholesale

Banking, Retail Banking and Financial Divisions shall attend the meetings as long as the bank

account pending approval by this committee corresponds to any of the above-mentioned divisions.

It is in charge of approving and signing the following transactions: Ratings and transactions

granted to customers/groups which risk level is greater than 2.5% of the Bank’s computable

regulatory capital (“RPC”, as per its initials in Spanish) as of last December, with annual updating.

The Committee meets at least once every week. Approved operations are recorded in signed and

dated minutes.

ASSET-LIABILITY COMMITTEE (ALCO): Five Directors, the Chief Executive Officer, the Retail

Banking Manager, the Wholesale Banking Manager, the Financial Division Manager, the Risk

Management Division Manager and the Planning Division Manager are members of this Committee.

It is in charge of analyzing the evolution of Banco Galicia’s business from a financial point of view,

in regard to fund raising and different assets placement. It is also in charge of the follow-up and

control of liquidity, interest rate and currency mismatches. This Committee is in charge of

analyzing, together with the business divisions, measures in connection with the management of

interest rate, currency and maturity mismatches, with the goal of maximizing financial and foreign-

exchange results within risk and capital use policies. This Committee is also responsible for

suggesting changes to these policies, if necessary, to the Board of Directors. The Committee

meets at least once a month. Its resolutions are summarized in writing in minutes.

INFORMATION TECHNOLOGY COMMITTEE: This Committee is composed of three Directors, the

Chief Executive Officer, the Comprehensive Corporate Services Division Manager and the IT

Department Manager. This Committee is in charge of supervising and approving the development

plans of new systems and their budgets, as well as supervising these systems’ budget control. It

is also responsible for approving the general design of the systems’ structure, the main processes

thereof and the systems implemented, as well as monitoring the quality of the Bank’s systems,

within the policies established by the Board of Directors. The Committee meets at least once every

three months. It can hold extraordinary meetings in case there is any issue that requires urgent

consideration. Its resolutions are summarized in writing in minutes.


AUDIT COMMITTEE: In accordance with the Argentine Central Bank’s regulations, Banco Galicia

formed an Audit Committee composed of two Directors and the Internal Audit Manager. The

Committee is in charge of supervising the adequacy and conformity, as well as the effective

functioning of the internal control systems so as to ensure compliance with all the Bank’s rules

submitted to the Argentine Central Bank and the self-regulated entities of the capital market. The

Committee meets at least once a month. Its resolutions are entered in minutes, which are

transcribed in signed books.

COMMITTEE FOR THE CONTROL AND PREVENTION OF MONEY LAUNDERING AND FUNDING OF

TERRORIST ACTIVITIES: It is composed of two Directors, the Chief Executive Officer, the

Manager in charge of the Anti-Money Laundering Unit (UAL), the Internal Audit Manager, and the

Managers of the following Divisions: Risk Management, Credit, Financial, Wholesale Banking,

Retail Banking and Comprehensive Corporate Services. The Syndics can be invited to attend any

meeting called by this Committee. In compliance with the regulations set forth by the Argentine

Central Bank, Messrs. Guillermo J. Pando and Raúl H. Seoane, Directors, have been appointed as

the Bank’s officers responsible for the control and prevention of money laundering and funding of

terrorist activities. Likewise, the Financial Division Manager is the officer in charge of financial

intermediation transactions. This Committee is responsible for planning, coordinating and enforcing

compliance with the policies on the issue established and approved by the Board of Directors. The

Committee is scheduled to meet at least once every two months and its resolutions must be

registered in a minutes book.

DISCLOSURE COMMITTEE: This Committee is composed of five Directors (two of whom are

independent ones), the Chief Executive Officer, the Managers of the Planning Division and the Risk

Management Division, the Internal Audit Manager, the Accounting Division, the Asset and

Liabilities Management, the Institutional Relations Department and Legal Advisory Managers, and

the Person in Charge of Market Relations. The Syndics can be invited to attend any meeting called

by this Committee. A member of the Committee that was created for the same purpose by Grupo

Financiero Galicia also attends the meetings held by this Committee. Likewise, the Committee may

call officers from Banco Galicia's different divisions whenever it may deem necessary. This

Committee was created to comply with the provisions of the U.S. Sarbanes-Oxley Act. The

Committee will meet every three months or as long as there are issues that require consideration.

Its resolutions are summarized in writing in minutes.

HUMAN RESOURCES COMMITTEE: It is composed of two Directors, the Chief Executive Officer

and the Organizational Development and Human Resources Manager. It is in charge of the

appointment, transfer, turnover, development, headcount and compensation of the personnel

included in salary levels 9 and above (Hay System). It is also in charge of assessing and approving

the policies set by the Board of Directors with regard to incentives, respecting the definitions

provided for by the Risk Management Committee, in order to ensure an appropriate risk

assumption by the assessed parties. It shall also approve the payment of incentives together with

the Managers of the Risk Management and Planning Divisions. The Committee meets every six

months or whenever there are issues that require consideration. Its resolutions are summarized in

writing in minutes.

PLANNING AND MANAGEMENT CONTROL COMMITTEE: This Committee is composed of five

Directors, the Chief Executive Officer, the Managers of the Risk Management Division and

Planning Division and the Internal Audit Manager. The Syndics can be invited to attend any

meeting called by this Committee. It is in charge of analyzing, defining and following up the

consolidated balance sheet and income statement, and carrying out the quarterly budgetary follow-

up by Division. Furthermore, it is in charge of approving, together with the Organizational

Development and Human Resources Manager, compliance levels that shall be used in the

assessment of staff and of the budgeted amount for the payment of annual incentives. The

Committee meets at least once every month. Its resolutions are summarized in writing in minutes.


SEGMENTS AND BUSINESS MANAGEMENT COMMITTEE: This Committee is composed of three

Directors, the Chief Executive Officer, the Division Managers, the Department Managers and those

officers whose participation is deemed convenient and who are especially called upon. It is in

charge of analyzing, defining and following up businesses and segments. The Committee will meet

at least once every three months. Its resolutions are summarized in writing in minutes.

CRISIS COMMITTEE: This Committee is composed of five Directors and the Chief Executive

Officer. The Committee may call those officers whose participation is deemed relevant. It is in

charge of evaluating the situation upon facing a liquidity crisis and deciding the steps to be

implemented to tackle it. The Committee shall meet when convened by the Board of Directors and

shall hold sessions as may be required until the liquidity crisis ends. Its resolutions are summarized

in writing in minutes.

FINANCIAL COMMITTEE – CONSUMER BANKING: This Committee is composed of two Directors,

the Chief Executive Officer, the Financial Division and Risk Management Managers, and the

Financial Operations and Capital Market Managers. The Committee is also composed of Tarjetas

Regionales S.A.’s Chief Executive Officer and Financial Manager and Compañía Financiera

Argentina S.A.’s Financial Manager. The members of the Committee may request the presence of

officers from other areas or from the Companies if matters warrant so. It is in charge of analyzing

the financial evolution and the funding needs of consumer financing companies, as well as

analyzing the portfolio and liquidity evolution and the related policies, and assessing the funding

alternatives. It shall meet at least every two months. Its resolutions are summarized in writing in

minutes.

On a monthly basis, the Board of Directors is informed of the actions taken by the Committees,

which are written down in minutes.

Corporate Organization

On August 31, 2009, Mr. Daniel A. Llambías, accountant, was appointed Banco de Galicia’s Chief

Executive Officer by decision of the Board of Directors. The Chief Executive Officer is in charge of

implementing the strategic goals established by Banco Galicia’s Board of Directors. He also

coordinates the Managers of the Bank’s Divisions, reporting to the Board of Directors.

At fiscal year-end, the following Divisions report to Banco Galicia’s Chief Executive Officer:

RETAIL BANKING DIVISION: This Division is responsible for designing, planning and implementing

the vision, strategies and goals for the Retail Banking’ businesses and for each customer segment

and distribution channel. It is as well in charge of the definition and control of this Division’s

business goals. The following departments report to this Division: Marketing, Private Banking,

Branches, Digital, Channels and Retail Banking Planning.

WHOLESALE BANKING DIVISION: This Division is responsible for designing, planning and

implementing the vision, strategies and goals for the Wholesale Banking’ businesses and for each

customer segment (corporate, medium-sized companies, agricultural companies and public-sector

companies) and product. It is as well in charge of the definition and control of this Division’s

business goals. The following departments report to this Division: Large-corporations Banking and

Middle-market Banking, Agribusiness Sector, Wholesale Products and Marketing, Capital Markets

and Investment Banking, and Corporate Banking Centers.

FINANCIAL DIVISION: This Division is responsible for planning and managing the correct use of

financial resources and other Treasury’s goals, providing the appropriate funding for Banco

Galicia’s businesses, establishing and applying the Bank’s deposit-raising and funding policies


within the parameters established by Banco Galicia’s risk policies. It also manages short-term

resources and the investment portfolio, ensuring the correct conduction of transactions. The

following departments report to this Division: Commercial, Products, Banking Relations,

Information Support and Management, and Public Sector.

RISK MANAGEMENT DIVISION: The Division is responsible for analyzing risks in all of its areas:

financial, operational, credit, reputational and strategic, ensuring compliance with internal policies

and applicable regulations; keeping the Board of Directors abreast of the risks to which the Bank is

exposed and proposing the coverage thereof; and designing and proposing policies and procedures

for risk control and mitigation, administering the process that shall be used to assess the

relationship between own resources available and resources necessary to maintain an appropriate

risk profile. The following departments report to this Division: Wholesale Risk, Retail Risk, Financial

Risk, Operational Risk, Risk Information and Analysis, and Development and Administration of

Models.

CREDIT DIVISION: This Division is responsible for developing and proposing the strategies for

credit and credit-granting policies, as well as managing and monitoring credit origination

processes, follow-up and control thereof, and the recovery of past-due loans. This aims at

ensuring the quality of the loan portfolio, cost and time efficiency, and recovery optimization, thus

minimizing loan losses and optimizing efficiency in processes and business credit granting. The

following departments report to this Division: Credit Analysis, Corporate Credit Approval,

Consumer Credit, Consumer Credit Recovery, Portfolio Recovery and Credit Strategy and Planning.

COMPREHENSIVE CORPORATE SERVICES DIVISION: This Division is responsible for designing,

planning and implementing the strategies for the IT, Organization, Operations, Purchase of Goods

and Services and Infrastructure Divisions, and the maintenance thereof. It is as well in charge of

Banco Galicia’s physical safety and information, with the purpose of ensuring and maintaining the

logistic support for its operations and activities. The following departments report to this Division:

Operations, IT, Organization, Engineering and Maintenance, Information Security and Management

and Security.

ORGANIZATIONAL DEVELOPMENT AND HUMAN RESOURCES DIVISION: This Division is in

charge of designing, planning and implementing Human Resources strategies, as well as defining

and controlling management goals of Banco Galicia’s human resources with the purpose of

ensuring homogeneous practices, availability of qualified and motivated personnel and a proper

work environment. The following departments report to this Division: Human Resources Advisory,

Human Resources Management, Compensation, Sustainability, Talent Management, Internal

Communications and Culture.

STRATEGIC PLANNING DIVISION: This Division is responsible for planning, coordinating and

controlling the development and maintenance of budget, management planning and control, and

accounting and tax activities. The following departments report to this Division: Accounting, Tax

Advisory, Management Control, Efficiency Control, Research, Consolidation and Analysis, and

Assets and Liabilities Management.

CUSTOMERS’ EXPERIENCE DIVISION: This Division is responsible for building, along with all the

Bank’s sectors, a customer-oriented culture, lead priority and cross-section projects to improve the

Customer’s Experience, design and manage a sound and integrated ongoing improvement system,

lead the learning cycle to share the best practices and support the ongoing improvement cycle

with NPS, LEAN and Innovation methodologies. The following departments report to this Division:

NPS Operation, Customer’s Vision, Initiatives, and Analysis and Indicators.

LEGAL ADVISORY DEPARTMENT DIVISION: This Department Division is responsible for providing

advisory services and determining the steps to be taken for Banco Galicia’s business conduction


under the regulations in force, with the purpose of ensuring the legitimacy thereof and avoiding

loss of rights, indemnifications and/or penalties.

INSTITUTIONAL RELATIONS DEPARTMENT DIVISION: This Department Division is responsible for

creating and proposing institutional communication strategies and managing and controlling press

activities, as well as developing the institutional image, providing advice to the different areas.

The following department divisions report to the Board of Directors:

INTERNAL AUDIT DEPARTMENT DIVISION: This Department Division is responsible for assessing

and monitoring the effectiveness, conformity and efficiency of internal control systems with the

purpose of ensuring compliance with applicable laws and regulations.

ANTI-MONEY LAUNDERING UNIT DEPARTMENT DIVISION: This Department Division is

responsible for coordinating and monitoring compliance with the policies established by the Board

of Directors on control and prevention of money laundering and funding of terrorist activities in

order to minimize reputational risks, thus ensuring compliance with applicable regulations and

international standards.

COMPLIANCE DIVISION: Its mission is to ensure compliance with applicable laws, regulations and

internal policies of the Bank, coordinating the appropriate tasks to avoid the imposition of penalties

due to legal or regulatory violations and the suffering of financial or reputational losses.

Banco Ga icia’s Supervisory Syndics’ Committee

Banco Galicia’s Bylaws provide for a Supervisory Syndics' Committee consisting of three Regular

Syndics and three Alternate Syndics. Pursuant to the General Corporations Law and the Argentine

Central Bank regulations, the regular and alternate Members of the Supervisory Syndics’

Committee are responsible for controlling that Banco Galicia’s administration is in accordance with

applicable regulations. Syndics and Alternate Syndics do not partake in business management and

cannot have managerial functions of any kind. They are in charge, among other tasks, of the

preparation of a report to the shareholders regarding the financial statements for each fiscal year.

The Syndics and the Alternate Syndics are elected at the Annual Ordinary Shareholders’ meeting

for a one-year term, and they can be reelected. Alternate Syndics act in the temporary or

permanent absence of one or more Syndics.

Policy for Compensation of Directors and Officers of Banco Galicia

Banco Galicia's Bylaws set forth that the Shareholders’ Meeting can establish that an incentive

compensation be paid to the Board of Directors, when applicable, in the amount approved by the

Shareholders' Meeting. Such amount cannot exceed six percent (6%) of the Bank's net income

before income tax or any other tax that may replace it.

Section 25, sub-section 2, of Banco Galicia’s Bylaws establishes that one of the powers and

duties of the Board of Directors is to determine, whenever it so deems convenient to corporate

interests, whether its members shall perform technical or administrative duties within the

Company and receive remuneration for such activities, with such remuneration having to be

reported at the Shareholders’ Meeting. In such cases, compensation for the relevant directors set

by the Shareholders’ Meeting shall be charged to general expenses.

The Board of Directors sets the policy for compensation of Banco Galicia’s personnel. Managers

receive a fixed compensation and they may also receive a variable compensation based on their

performance.


Five of the Directors are Banco Galicia’s employees, and they establish institutional policies and

control the execution thereof. Therefore, they receive fixed compensation and are entitled to

variable compensation based on their performance, provided that these additional payments do not

exceed the standard payments made by similar entities in the Argentine financial system, a

provision that is applicable to Managers as well.

The policy for compensation envisages the possibility of having access to retirement insurance.

The Bank does not maintain any options plans.

The Shareholders’ Meeting must approve the compensation of the Board of Directors after the

close of the fiscal year.

During the fiscal year, provisions were established to cover the variable compensation of Banco

Galicia’s Board of Directors and managers for the fiscal year.


Management’s aiscussion and Ana ysis

Selected Financial Information

Consolidated Assets and Liabilities

Income Statement

Risk Management

Credit Risk

Financial Risks

Operational Risk

Regulatory Capital

Capital and Reserves and Proposed Distribution of Profits


MANAGEMENT’S DISCUSSION AND ANALYSIS

In the following analysis of Grupo Financiero Galicia S.A.'s financial condition and results of

operations, data for Grupo Financiero Galicia S.A. is consolidated, on a line-by-line basis, with the

financial statements of the companies it controls directly or indirectly, as explained in the Notes to

the Consolidated Financial Statements, unless there is clarification to the contrary.

Grupo Financiero Galicia’s consolidated financial statements, as well as the figures expressed in

the tables in this report, correspond to Grupo Financiero Galicia S.A., Banco de Galicia y Buenos

Aires S.A. consolidated(1), Sudamericana Holding S.A. and its subsidiaries, Galicia Administradora

de Fondos S.A., Galicia Warrants S.A. and Net Investment S.A.

Due to the fact that Banco de Galicia y Buenos Aires S.A. is Grupo Financiero Galicia’s main equity

investment, a financial institution subject to the Argentine Central Bank Regulations, the Company

has adopted the valuation and disclosure criteria applied by Banco de Galicia y Buenos Aires S.A.,

which in some significant aspects differ from Argentine GAAP.

By means of Communiqué “A” 3671 dated July 25, 2002, the Argentine Central Bank established

that, for the valuation of foreign currency balances, financial institutions had to use the reference

exchange rate published by the Argentine Central Bank. Therefore, all assets and liabilities in

foreign currency were valued using that exchange rate which, at the end of fiscal year 2013, was

of Ps. 6.518 per U.S. Dollar, at the end of fiscal year 2014 was of Ps. 8.552 per U.S. Dollar, and

at the end of fiscal year 2015 was of Ps. 13.005 per U.S. Dollar.

Grupo Financiero Galicia’s fiscal year closes every December 31, as well as the fiscal year of the

companies it controls either directly or indirectly, except for Sudamericana Holding S.A. and its

subsidiaries, whose fiscal year closes every June 30.

(1) Banco de Galicia y Buenos Aires S.A. consolidates its financial statements with Tarjetas Regionales S.A. and its subsidiaries, Tarjetas del

Mar S.A., Compañía Financiera Argentina S.A., Cobranzas & Servicios S.A., Galicia Valores S.A., Banco Galicia Uruguay S.A. (under

liquidation proceedings), Galicia Administradora de Fondos (until March 31, 2014, since in April it was sold to Grupo Financiero Galicia) and

Galicia Cayman S.A. (until September 30, 2014, and merged with the Bank as from October 1, 2014).


SELECTED FINANCIAL INFORMATION

December 31,

In millions of Pesos, except as stated otherwise 2015 2014 2013

Consolidated Income Statement

Financial Income 25,844 19,860 13,076

Financial Expenses 13,402 10,321 6,170

Net Financial Income 12,442 9,539 6,906

Provision for Loan Losses 2,214 2,411 1,776

Net Income from Services 7,837 5,699 4,239

Income from Insurance Activities 1,801 1,238 905

Administrative Expenses 12,905 9,221 7,428

Minority Interest (365) (230) (209)

Income (Loss) from Equity Investments 100 213 124

Miscellaneous Income / (Loss), Net 443 503 295

Income Before Taxes 7,139 5,330 3,056

Income Tax 2,801 1,992 1,232

Net Income 4,338 3,338 1,824

Consolidated Balance Sheet

Cash and Due from Banks 30,835 16,959 12,560

Government and Corporate Securities 15,525 10,010 3,987

Loans, Net 98,345 66,608 55,265

Assets 161,748 107,314 83,156

Deposits 100,039 64,666 51,395

Other Liabilities (1) 47,224 32,402 24,814

Shareholders’ Equity 14,485 10,246 6,947

Average Assets 122,684 92,510 69,844

Balance Sheet Items Denominated in Foreign Currency (%)

Assets 16.88 12.11 11.74

Liabilities 18.86 13.61 13.71

(1) It includes, mainly, debts with stores due to purchase transactions, liabilities with other international banks and entities, and debt

securities.


SELECTED FINANCIAL INFORMATION (cont.)

December 31, In millions of Pesos, except as stated otherwise 2015 2014 2013

Selected Ratios (%)

Profitability and Efficiency

Net Yield on Average Interest-Earning Assets (1) 14.18 % 14.42 % 13.77 %


Interest Spread, Nominal Basis (3) 9.13 10.13 10.43

Return on Average Assets (4) 3.83 3.85 2.91

Return on Average Shareholders’ Equity (5) 35.54 39.07 32.47

Administrative Expenses as a Percentage of Net Operating Income (6) 63.64 60.51 66.65

Net Income from Services as a Percentage of Net Operating Income(6) 38.65 37.40 38.03

Net Income from Services as a Percentage of Administrative Expenses 60.73 61.80 57.07

Capital

Shareholders' Equity as a Percentage of Total Assets 8.96 % 9.55 % 8.35 %

Tangible Shareholders' Equity(7) as a Percentage of Total Assets 7.70 7.87 6.63

Total Liabilities as a Multiple of Shareholders' Equity 10.17 x 9.47 x 10.97 x

Liquidity

Cash and Due from Banks as a Percentage of Total Deposits 30.82 26.23 24.44 %

Loans, Net, as a Percentage of Total Assets 60.80 62.07 66.46

Loan Portfolio Quality

Past-due Loan Portfolio(8) as a Percentage of Total Loans 2.46 % 2.61 % 2.69 %

Non-accrual Portfolio(9) as a Percentage of Loans to the Private Sector 3.11 3.57 3.57

Allowance for Loan Losses as a Percentage of

Total Loans (Excluding Interbank Loans) 3.50 3.79 3.76

Non-accrual Loan Portfolio (9) as a Percentage of Total Loans (Excluding

Interbank Loans) 3.12 3.59 3.62

Allowance for Loan Losses as a Percentage of

Non-accrual Loans(9) 112.41 105.78 103.80

Inflation and Exchange Rate

Wholesale Inflation (10) (11) 12.65 % 28.27 % 14.76 %

Exchange Rate Variation (12) 52.07 31.21 32.55

CER (13) 15.05 24.34 10.53

(1) Net interest earned divided by average interest-earning assets (average interest-bearing assets). For a description of net interest

earned, see the “Interest-Earning Assets-Net Yield and Spread” table. (2) Financial Income less Financial Expenses divided by average interest-earning assets. (3) It represents the difference between the average nominal interest rates earned on interest-earning assets and the average nominal

interest rates paid on interest-bearing liabilities. (4) Net Income plus Minority Interests, divided by Average Total Assets. (5) Net Income divided by Average Shareholders' Equity. (6) Net Operating Income: Financial Income minus Financial Expenses plus Net Income from Services. (7) Tangible Shareholders’ Equity is defined as Shareholders’ Equity minus Intangible Assets. (8) Past-due loans consist of principal or interest amounts which have been 91 days or more past due. (9) For a description of non-accrual loans, see “Risk Management - Credit Risk - Asset Quality of the Loan Portfolio”. (10) In accordance with the variation of the Domestic Wholesale Price Index in Argentina (the WPI, or IPIM as per its initials in Spanish).

Data as of October 2015 (October 2015/October 2014 Variation) (11) Source: Instituto Nacional de Estadística y Censos (Argentine Institute of Statistic and Census, INDEC). (12) Variation of the exchange rates of the Peso vis-à-vis the U.S. Dollar. (13) Reference Stabilization Coefficient (Coeficiente de Estabilización de Referencia, based on the CPI).


Physical Data

December 31,

2015 2014 2013

Employees

Banco Galicia 5,573 5,374 5,487

Regional Credit-card Companies 5,040 5,232 5,668

Compañía Financiera Argentina S.A. 1,158 1,112 1,170

Sudamericana Holding S.A. 307 242 224

Galicia Administradora de Fondos S.A. 17 16 13

Other Companies 33 36 41

Total Employees 12,128 12,012 12,603

Branches Banco Galicia 260 261 261

Regional Credit-card Companies 207 207 204

Compañía Financiera Argentina S.A. 58 59 59

Total Branches 525 527 524

Deposit Accounts

Banco Galicia 3,375,439 2,849,895 2,618,269


Total Deposit Accounts 3,592,612 3,006,428 2,767,659

CONSOLIDATED ASSETS AND LIABILITIES

Assets

The structure and main components of Grupo Financiero Galicia’s consolidated assets as of

December 31, 2015, and as of the same date of the two previous years were as follows:

Assets

In millions of Pesos December 31,

2015 % 2014 % 2013 %

Cash and Due from Banks 30,835 19.1 16,959 15.8 12,560 15.1

Government and Corporate Securities 15,525 9.6 10,010 9.3 3,987 4.8

Loans, Net 98,345 60.8 66,608 62.1 55,265 66.5

Other Assets 17,043 10.5 13,737 12.8 11,344 13.6

Total 161,748 100.0 107,314 100.0 83,156 100.0

Cash and fue from Banks

The item “Cash and Due from Banks” included cash for Ps. 7,288 million, balances held at the

Argentine Central Bank for Ps. 23,107 million and balances held in correspondent banks for Ps.

440 million. The balance held at the Argentine Central Bank is computable for meeting the

minimum cash requirements.

Government and Corporate Securities

The following table shows the components of the item “Government and Corporate Securities” in

terms of cash holdings and net position (cash holdings plus forward purchases and spot purchases

pending settlement, less forward sales and spot sales pending settlement).


Government and Corporate Securities – Holdings and Net Position December 31, 2015

In millions of Pesos

Holdings Forward Transactions Spot Transactions

Pending Settlement Net

Position Purchases(

1) Sales(2) Purchases Sales

Government Securities

Holdings Recorded at Cost plus Yield

Pesos 1,390 - - 30 - 1,420

Holdings Recorded at Fair Market Value

Pesos 1,954 17 - 4 (22) 1,953

U.S. Dollars 422 - (15) 175 (11) 571

Instruments Issued by the Argentine Central Bank

Pesos 6,924 1,050 - 128 - 8,102

U.S. Dollars 4,835 - - - - 4,835

Total Government Securities 15,525 1,067 (15) 337 (33) 16,881

Total Government and Corporate Securities 15,525 1,067 (15) 337 (33) 16,881

(1) They include securities used as collateral.

(2) They include government securities deposits.

As of December 31, 2015, the Company’s net position in government and corporate securities

amounted to Ps. 16,881 million.

The amount of government securities at cost plus yield issued in Pesos, for Ps. 1,420 million,

corresponded to debt securities and treasury bills, mainly of the Provinces of Buenos Aires,

Neuquén and Entre Ríos.

The net position of government securities measured at fair market value in Pesos amounting to Ps.

1,953 million corresponded, mainly, to Banco Galicia’s holdings of National Government Bonds

due 2016, 2017 and 2019, for Ps. 117 million, Ps. 695 million and Ps. 81 million, respectively,

national treasury bonds due 2016 for Ps. 593 million and discount bonds due 2033 for Ps. 284

million. In U.S. Dollars, the position amounted to Ps. 571 million, of which Bono Argentino de

Ahorro para el Desarrollo Económico (BAADE - Argentine Bond for Economic Development) for Ps.

199 million stood out.

In turn, the position for instruments issued by the Argentine Central Bank amounted to Ps. 12,937

million, made up of Lebacs in Pesos for Ps. 8,102 million and in U.S. Dollars for Ps. 4,835 million.

Loans

The category “Loans, Net” in the “Assets” table was made up of the following as of the indicated

dates:

Loans, Net


2015 2014 2013

To the Non-Financial Public Sector 18 15 13

To the Financial Sector 754 191 627

To the Non-Financial Private Sector 97,339 66,141 54,038

Residents Abroad 234 261 587

Total 98,345 66,608 55,265

As of December 31, 2015, total net consolidated loans amounted to Ps. 98,345 million and,

representing 60.8% of total assets, continued to be the Company’s most important asset.

For more information, see “Risk Management-Credit Risk”.


Other Assets

The category “Other Assets” mainly includes the following items:

Other Assets


2015 2014 2013

Other Receivables Resulting from Financial Brokerage 8,061 6,798 5,696

Receivables from Financial Leases 958 1,048 1,128

Equity Investments in Other Companies 52 52 89

Miscellaneous Receivables 2,569 1,760 1,162

Bank Premises and Equipment, Miscellaneous Assets and Intangible

Assets 4,925 3,759 3,062

Others (1) 478 320 207

Total 17,043 13,737 11,344

(1) It includes, among others, assets related to the insurance activity.

At fiscal year-end, the item “Other Receivables resulting from Financial Brokerage” primarily

included the following: Ps. 1,639 million for unlisted negotiable obligations, Ps. 1,568 million

corresponding to balances deposited at the Argentine Central Bank as guarantees in favor of

clearing houses and Ps. 1,495 million corresponding to participation certificates and debt securities

of Financial Trusts.

Exposure to the Argentine Public Sector

Grupo Financiero Galicia’s exposure to the public sector as of the referred dates was as follows:

Exposure to the Public Sector(*)


2015 2014 2013

Government Securities – Net Position 16,881 10,379 4,298

Held for Trading 3,944 2,665 1,351

Bonar 2015 - - 392

Lebac - Nobac 12,937 7,714 2,555

Loans 18 15 13

Secured Loans and Other Loans 18 15 13

Other Receivables Resulting from Financial Brokerage 960 867 1,105

Participation Certificates and Trust Securities 709 830 1,079

Others 251 37 26

Total 17,859 11,261 5,416

(*) It does not include deposits with the Argentine Central Bank, since these are assets through which the Bank complies with the

minimum cash requirements set up by such entity.

As of December 31, 2015, the exposure to the public sector reached Ps. 17,859 million. Not

taking into consideration the debt securities issued by the Argentine Central Bank, the exposure

amounted to Ps. 4,922 million, equal to 3% of total assets.

As of December 31, 2014, such exposure amounted to Ps. 3,547 million, representing 3.3% of

total assets.

The increase in exposure to the public sector during the last twelve months was due to the

purchase of national treasury bonds due 2016 for Ps. 593 million, along with a higher balance of

provincial treasury bills and debt securities, among others.


Exposure to the Private Sector

The following table shows Banco Galicia’s total exposure to the private sector. Such caption

includes all the balance sheet and memorandum account items that represent a credit exposure to

the private sector: Loans, receivables from financial leases, debt securities and other financing,

such as guarantees granted and unused balances of loans granted, as well as current balances at

the dates indicated of loans duly transferred to the different trusts.

Exposure to the Private Sector


2015 2014 2013

Loans 101,902 69,208 57,408

Receivables from Financial Leases 980 1,066 1,150

Securities 1,471 724 888

Other Financing (1) 10,629 7,877 6,355

Total Loans 114,982 78,875 65,801

Trust Assets(2) - 141 -

Total 114,982 79,016 65,801

(1) It includes guarantees granted, unused balances of loans granted and some items under Other Receivables Resulting from

Financial Brokerage. (2) CFA Trust I Financial Trust.

As of December 31, 2015, the Bank’s total exposure to the private sector (without deducting the

allowances for loan losses) amounted to Ps. 114,982 million, an annual increase of 46%.

Total loans included Ps. 22,045 million corresponding to regional credit-card companies and Ps.

3,429 million corresponding to CFA.

In 2015, loans to the private sector grew mainly in individuals (Ps. 18,618 million, equivalent to

47%), small- to medium-sized companies (PyMES) (Ps. 8,508 million, equivalent to 41%) and

large corporations (Ps. 5,029 million, equivalent to 59%).

As regards economic sectors, the growth of loans granted to the consumer sector (Ps. 19,265

million, equivalent to 48%), the manufacturing industry (Ps. 3,773 million, equivalent to 41%), the

agricultural and livestock sector (Ps. 3,164 million, equivalent to 39%), the wholesale and retail

business (Ps. 2,801 million, equivalent to 47%) and communication and transportation (Ps. 2,198

million, equivalent to 76%). See “Risk Management - Credit Risk – Loan Portfolio”.

Funding and Liabilities

The structure and main components of the consolidated funding as of December 31, 2015, and as

of the end of the two previous fiscal years were as follows:


Liabi ities and Shareho ders’ Equity

December 31, In millions of Pesos 2015 % 2014 % 2013 %

Deposits 100,039 61.8 64,666 60.3 51,395 61.8

Checking Accounts 19,437 12.0 15,755 14.7 12,394 14.9

Savings Accounts 27,519 17.0 16,897 15.8 11,801 14.2

Time Deposits 51,118 31.6 30,730 28.6 26,185 31.5

Others 1,045 0.6 722 0.7 574 0.7

Other Interest, Exchange Rate Differences Payable and CER

Adjustment 920 0.6 562 0.5 441 0.5

Credit Lines (1) 2,812 1.8 1,848 1.7 2,153 2.5

Argentine Central Bank 7 - 7 - 6 -

Local Banks(2) 1,397 0.9 1,113 1.0 1,462 1.7

International Banks and Credit Entities 1,273 0.8 727 0.7 685 0.8

Repurchase Agreement and Reverse Repurchase

Agreement Transactions 135 0.1 1 - - -

Subordinated and Unsubordinated Debt Securities (1) 12,827 7.9 10,176 9.5 7,612 9.2

Other Liabilities (3) 31,585 19.5 20,378 19.0 15,048 18.1

Shareho ders’ Equity 14,485 9.0 10,246 9.5 6,947 8.4

Total 161,748 100.0 107,314 100.0 83,155 100.0

(1) Each item includes principal, interest accrued, exchange rate differences and premiums payable, as well as CER adjustment,

where applicable.

(2) It includes credit line granted by the IDB (Inter-American Development Bank) through the Secretariat of Industry and Commerce.

(3) It includes debts with stores due to credit card transactions, collections on account of third parties in Pesos and U.S. Dollars,

miscellaneous obligations and allowances, among others.

The main sources of funds are deposits from the private sector, lines of credit extended by local

banks and entities, international banks and multilateral credit agencies, repo transactions mainly

related to government securities, mid- and long-term debt securities placed in the local and

international capital market and debts with stores due to credit card transactions.

Deposits

As of December 31, 2015, total consolidated deposits amounted to Ps. 100,039 million,

representing 61.8% of total funds (including shareholders’ equity).

During the fiscal year, total consolidated deposits increased 55%, mainly as a consequence of the

58% increase in deposits from the private sector.

Maturity of Deposits as of December 31, 2015, pursuant to their Term (1)


Peso-denominated U.S. Dollar-

denominated Total

Amount % of

Total Amount

% of

Total Amount

% of

Total

Checking Accounts and Other Demand Deposits 19,437 22.9 - - 19,437 19.6


Time Deposits Maturing 45,589 53.8 5,529 38.5 51,118 51.6

Up to 30 days 15,159 17.9 2,658 18.5 17,817 18.0

From 31 to 59 days 15,996 18.9 453 3.2 16,449 16.6

From 60 to 89 days 8,081 9.5 3 0.0 8,084 8.2

From 90 to 179 days 3,480 4.1 1,817 12.7 5,297 5.3

From 180 to 365 days 1,699 2.0 591 4.1 2,290 2.3

More than 365 days 1,174 1.4 7 0.0 1,181 1.2

Other Deposits Maturing 900 1.1 145 1.0 1,045 1.0

Up to 30 days 502 0.6 130 0.9 632 0.6

From 31 to 59 days - - - - - -

From 60 to 89 days - - - - - -

From 90 to 179 days 1 - - - 1 -

From 180 to 365 days 395 0.5 - - 395 0.4

More than 365 days 2 - 15 0.1 17 -

Total 84,757 100.0 14,362 100.0 99,119 100.0

(1) Only Principal. It does not include CER adjustment or else interest.


The above-mentioned chart shows that the highest concentration of maturities for time deposits

was in the terms up to 59 days, representing 67% of total time deposits. At fiscal year-end, the

average term for the raising of non-adjusted Peso- and U.S. Dollar-denominated time deposits was

approximately 51 days.

U.S. Dollar-denominated deposits, for Ps. 14,362 million, represented 14.5% of total deposits.

Local Banks and Entities

As of December 31, 2015, credit lines granted by local banks and entities amounted to Ps. 1,397

million. This amount (principal plus interest) mainly corresponds to Ps. 1,147 million for financing

received from local banks by the regional credit-card companies and CFA, Ps. 127 million for call

loans received by the Bank and the regional credit-card companies, Ps. 115 million received from

the BICE, and Ps. 8 million for the credit line granted by the IDB through the Secretariat of

Industry and Commerce.

International Banks and Credit Entities

As of December 31, 2015, loans granted by international banks and credit entities amounted to

Ps. 1,273 million. This amount (principal plus interest) represents U.S. Dollar-denominated debt

subject to foreign law, of which, mainly, Ps. 1,096 million correspond to prefinancing and foreign

trade transactions, Ps. 69 million received from Proparco, Ps. 68 million received from the FMO,

Ps. 24 million to debt with international banks and credit entities and Ps. 16 million to a credit line

granted by the IDB through the Secretariat of Industry and Commerce.

Debt Securities

The following table shows the Bank’s consolidated debt securities as of December 31, 2015:

Debt Securities (*)

In millions of Pesos, except for rates (%) Currenc

y Maturity Date

Annual Interest Rate

(%) Balances as

of 12.31.15

Grupo Financiero Galicia

- Class V Series II Negotiable Obligations (1) Pesos 01-31-2017 Badlar + 525 b.p. 76

- Class VI Series I Negotiable Obligations (2) Pesos 04-23-2016 Badlar + 325 b.p. 116

- Class VI Series II Negotiable Obligations (3) Pesos 10-23-2017 Badlar + 425 b.p. 110

- Class VII Negotiable Obligations (4) Pesos 07-27-2017 27.00%/Badlar +425 b.p. 160

Banco Galicia

- Class I Negotiable Obligations (5) U.S.

Dollars 05-04-2018 8.75% 3,794

- Subordinated Negotiable Obligations (6) U.S.

Dollars 01-01-2019 16.00% 3,056

- Others (7) U.S.

Dollars Past due - 6

Tarjetas Cuyanas

- Class XIV Series II Negotiable Obligations (8) Pesos 05-16-2016 Badlar + 415 b.p. 113

- Class XVI Negotiable Obligations (9) Pesos 08-01-2016 Badlar + 340 b.p. 97

- Class XVIII Negotiable Obligations (10) Pesos 10-31-2016 Badlar + 400 b.p. 114

- Class XIX Series II Negotiable Obligations (11) Pesos 02-20-2017 Badlar + 495 b.p. 69

- Class XX Negotiable Obligations (12) Pesos 12-10-2016 27.90%/Badlar + 450 b.p. 257

- Class XXI Negotiable Obligations (13) Pesos 02-12-2017 27.50%/Badlar + 450 b.p. 204

- Class XXII Negotiable Obligations (14) Pesos 05-13-2017 Badlar + 425 b.p. 257

Tarjeta Naranja

- Class XIII Negotiable Obligations (15) U.S.

Dollars 01-28-2017 9.00% 1,749

- Class XXIV Series II Negotiable Obligations (16) Pesos 02-26-2017 Badlar + 500 b.p. 33

- Class XXV Series II Negotiable Obligations (17) Pesos 04-30-2016 Badlar + 415 b.p. 143


Debt Securities (*)

In millions of Pesos, except for rates (%) Currenc

y Maturity Date

Annual Interest Rate

(%) Balances as

of 12.31.15

- Class XXVI Series II Negotiable Obligations (18) Pesos 07-11-2016 Badlar + 399 b.p. 145

- Class XXVII Series II Negotiable Obligations (19) Pesos 10-03-2016 Badlar + 395 b.p. 120

- Class XXVIII Series II Negotiable Obligations (20) Pesos 01-22-2017 Badlar + 450 b.p. 94

- Class XXIX Negotiable Obligations (21) Pesos 04-27-2017 27.75%/Badlar + 450 b.p. 285

- Class XXX Negotiable Obligations (22) Pesos 06-29-2017 27.75%/Badlar +450 b.p. 346

- Class XXXI Negotiable Obligations (23) Pesos 04-19-2017 27.00%/Badlar + 450 b.p. 321

Compañía Financiera Argentina S.A.

- Class XII Series II Negotiable Obligations (24) Pesos 09-24-2016 Badlar + 400 b.p. 156

- Class XIII Series II Negotiable Obligations (25) Pesos 12-09-2016 Badlar + 440 b.p. 75

- Class XIV Negotiable Obligations (26) Pesos 02-05-2017 27.24%/Badlar + 425 b.p. 227

- Class XV Negotiable Obligations (27) Pesos 04-30-2017 27.99%/Badlar + 450 b.p. 194

Total 12,317

(*) Only principal (it does not include interest), net of eliminations when appropriate.

(1) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on January 31, 2017. (2) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on April 23, 2016. (3) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on October 23, 2017. (4) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27% for the first nine months and Badlar + 425 b.p. for the

following 15 months. Principal shall be fully paid upon maturity, on July 27, 2017. (5) Interest shall be paid in cash, semiannually in arrears. Principal shall be fully paid upon maturity, on May 4, 2018. (6) Interest payable in cash: 11% annually as from January 1, 2014 and up to (but excluding) January 1, 2019. Also, interest is paid on additional

subordinated negotiable obligations due 2019, at a 5% rate annually from January 1, 2004, payable on January 1, 2014 and January 1, 2019.

Principal is fully payable on January 1, 2019, unless previously redeemed at par, plus unpaid accrued interest and additional amounts, if any, either

fully or partially, at the Bank’s option, at any time. (7) The balance represents debt (9% negotiable obligations due 2003) not tendered by its holders in the exchange offered by the Bank to restructure

its foreign debt, which was completed in May 2004. Interest balance amounts to Ps. 8 million.

(8) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on May 16, 2016. (9) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on August 1, 2016. (10) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on October 31, 2016. (11) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on February 20, 2017. (12) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.90% from the issuance date until the ninth month inclusive,

as from the tenth month and up to the maturity Badlar + 450 b.p. Principal shall be fully paid upon maturity on December 10, 2016. (13) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.50% from the issuance date until the sixth month inclusive,

as from the seventh month and up to the maturity Badlar + 450 b.p. Principal shall be fully paid upon maturity on February 12, 2017. (14) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on May 13, 2017. (15) Interest shall be paid semiannually, in January and July of each year, until maturity. Fixed rate in U.S. Dollars of 9%. Principal shall be paid in 3

equal and annual installments, starting from January 28, 2015 and until maturity on January 28, 2017. (16) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on February 26, 2017. (17) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on April 30, 2016. (18) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on July 11, 2016. (19) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on October 3, 2016. (20) Interest shall be paid on a quarterly basis in arrears. Principal shall be payable in three installments, 33.33% on July 22, 2016, 33.33% on October

22, 2016 and the remaining 33.34% upon maturity on January 22, 2017. (21) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.75% from the issuance date until the twelfth month

inclusive, as from the thirteenth month and up to the maturity Badlar + 450 b.p. Principal shall be fully paid upon maturity on April 27, 2017. (22) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.75% from the issuance date until the ninth month inclusive,

as from the tenth month and up to the maturity Badlar + 450 b.p. Principal shall be fully paid upon maturity on June 29, 2017. (23) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27% from the issuance date until the third month inclusive, as

from the fourth month and up to the maturity Badlar + 450 b.p. Principal shall be fully paid upon maturity on April 19, 2017. (24) Interest shall be paid on a quarterly basis in arrears. Principal shall be fully paid upon maturity, on September 24, 2016. (25) Interest shall be paid on a quarterly basis in arrears. Principal shall be paid in three installments, 33% on June 9, 2016, 33% on September 9,

2016, and 34% on December 9, 2016. (26) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.24% from the issuance date until the ninth month inclusive,

as from the tenth month and up to the maturity Badlar + 425 b.p. Principal shall be fully paid in three installments, 33% on August 5, 2016, 33%

on November 5, 2016 and 34% on February 5, 2017. (27) Interest shall be paid on a quarterly basis in arrears. Nominal Annual Fixed Rate of 27.99% from the issuance date until the ninth month inclusive,

as from the tenth month and up to the maturity Badlar + 450 b.p. Principal shall be fully paid in three installments, 33% on October 30, 2016,

33% on January 30, 2017 and 34% on April 30, 2017.

From the total debt securities for Ps. 12,317 million at fiscal-year end, Ps. 8,605 million

corresponded to the U.S. Dollar-denominated debt, out of which Ps. 3,794 million corresponded to

the negotiable obligations issued by the Bank due 2018, Ps. 3,056 million to subordinated

negotiable obligations due 2019, and Ps. 1,749 million to negotiable obligations due 2017 issued

by Tarjeta Naranja.

The difference with the total amount, for Ps. 3,712 million, corresponded to Peso-denominated

debt for negotiable obligations issued by Grupo Financiero Galicia, the regional credit-card

companies and CFA.


The balance of securities issued in Argentine pesos increased Ps. 119 million as compared to

2014 year-end, whereas U.S. Dollar-denominated debt increased Ps. 2,415 million, due to

quotation differences.


Other Liabilities

The category “Other Liabilities” mainly includes the following items:

Other Liabilities


2015 2014 2013

Other Liabilities Resulting from Financial Brokerage (1) 24,991 15,443 11,225

Miscellaneous Liabilities (2) 4,442 3,381 2,476

Provisions 482 366 443

Unallocated Items(3) 75 40 15

Other Liabilities (4) 488 367 287

Minority Interest in Controlled Companies 1,107 781 602

Total 31,585 20,378 15,048

(1) It mainly includes liabilities with stores in connection with credit-card transactions of Banco Galicia and the regional credit-card

companies.

(2) It includes balances of tax debt, social security contributions to be deposited and sundry creditors.

(3) It mainly includes balances among Banco Galicia’s branches for unallocated items corresponding to funds collected on account of third

parties.

(4) It includes liabilities related to the insurance activity.

INCOME STATEMENT

During the fiscal year, Grupo Financiero Galicia's net income amounted to Ps. 4,338 million,

representing a 30% increase as compared to income amounting to Ps. 3,338 million in fiscal year

2014.

This income was mainly the result of the equity investment in Banco Galicia, which recorded

income for Ps. 3,913 million during the fiscal year, in addition to the income from its equity

investments in Sudamericana Holding S.A. for Ps. 357 million and in Galicia Administradora de

Fondos S.A. for Ps. 110 million.

The annual increase in income was mainly the result of the increase in net operating income(1)

(33%), supported by the higher volume of intermediation with the private sector, jointly with a

higher income from insurance activities (46%) and lower provisions for loan losses (8%) due to the

better behavior of arrears. This positive effect was offset by higher administrative expenses

(40%), as a result of a higher activity level and the evolution of costs.

Net operating income for the fiscal year amounted to Ps. 20,279 million, a 33% increase as

compared to 2014. This positive evolution was due both to a Ps. 2,903 million (30%) and higher

net income from services for Ps. 2,138 million (38%).

Net earnings per share for the fiscal year were Ps. 3.34, compared to Ps. 2.57 in fiscal year 2014.

The return on average assets and the return on average shareholders’ equity for the fiscal year

were 3.83% and 35.54%, respectively, whereas in the previous fiscal year they were 3.85% and

39.07%, respectively.


Financial Income

Financial Income

December 31, In millions of Pesos 2015 2014 2013

Income from Loans and Other Receivables Resulting from

Financial Brokerage and Premiums Earned on Reverse Repurchase

Agreement Transactions 20,269 16,211 11,369

Income from Government and Corporate Debt Securities, Net 4,323 2,448 939

Others (1) 1,252 1,201 768

Total 25,844 19,860 13,076

(1) It reflects net income from receivables from financial leases, premiums on foreign currency forward transactions, as well as CER

adjustment and, in fiscal year 2014, gain (loss) on quotation differences.

Financial income amounted to Ps. 25,844 million, showing a 30% increase compared to the Ps.

19,860 million recorded in fiscal year 2014. This increase was the result of the increase in the

average volume of interest-earning assets, offset by a decrease in the average rate thereof.

For the fiscal years indicated, the average balance of the Company’s interest-earning assets and

interest-bearing liabilities, as well as the yields on its interest-earning assets and the cost of its

interest-bearing liabilities, were as follows:

Yield on Interest-Earning Assets and Interest-Bearing Liabilities

December 31,

In millions of Pesos, except for rates (%) 2015 2014 2013

Principal Rate Principal Rate Principal Rate

Interest-Earning Assets 94,805 25.78 70,349 26.66 54,160 23.03

Government Securities 14,616 24.07 8,760 21.16 4,156 14.33

Loans 77,807 26.13 59,072 27.49 47,912 24.01

Other Interest-Earning Assets 2,382 24.91 2,517 26.54 2,092 17.77

Interest-Bearing Liabilities 66,071 16.65 52,081 16.53 39,779 12.60

Checking Accounts - - 1 - 1 -


Time Deposits 38,533 22.28 30,229 21.80 23,257 16.22

Debt Securities 10,460 17.65 8,976 16.54 6,351 13.70

Other Interest-Bearing Liabilities 2,650 20.34 2,689 19.19 2,092 16.97

Spread and Net Yield

Interest Spread, Nominal Basis (1) 9.13 10.13 10.43

Net Yield on Interest-Earning Assets (2) 14.18 14.42 13.77


(1) It represents the difference between the average nominal interest rate on interest-earning assets and the average nominal

interest rate on interest-bearing liabilities. Interest rates include CER adjustment. (2) Net interest earned divided by average interest-earning assets (average interest-bearing assets). Interest rates include CER

adjustment.

Net interest earned corresponds to net financial income (financial income less financial expenses, as set forth in the income

statement), plus:

- financial fees, included in Income from Services - Related to Lending Transactions, in the Income Statement,

- contributions made to the Deposit Insurance Fund (FGD), included in Financial Expenses – Deposit Insurance Fund, in the

Income Statement and

- taxes on financial income, included in Financial Expenses – Others, in the Income Statement, less:

- Net income (loss) from corporate securities, included in Financial Income/Expenses – Income (loss) from Holding of

Government and Corporate Securities, in the Income Statement, and

- differences in the quotation of gold and foreign currency, included in Financial Income/Expenses – Differences in

Quotation of Gold and Foreign Currency, in the Income Statement, and

- premiums on foreign exchange forward transactions and adjustments on foreign exchange forward transactions, included

in Financial Income – Others, in the Income Statement.

Net interest earned also includes income that corresponds to government securities used as margin requirements of repurchase

agreement transactions. This income/loss is included in Miscellaneous Income (Loss) – Others, in the Income Statement. Income

(Loss) from Holding of Government Securities includes interest and income/loss resulting from variations in market quotations. (3) Financial income less financial expenses, divided by average interest-earning assets.


Market Share (*)

December 31, Percentages 2015 2014 2013

Total Deposits 7.44 6.63 6.92

Deposits from the Private Sector 9.41 8.79 9.20

Deposits in Checking and Savings Accounts, and Time Deposits 9.65 9.06 9.47

Total Loans

8.89 8.07 8.07

Loans to the Private Sector 9.60 8.76 8.78

(*) Banco Galicia and CFA within the Argentine market, based on daily information on deposits and loans prepared by the Argentine

Central Bank. End-of-month balances are used. Deposits and loans include only principal. Information related to regional credit-card

companies is not included.

Average interest-earning assets amounted to Ps. 94,805 million, representing an increase of Ps.

24,456 million (35%), as compared to Ps. 70,349 million in the previous fiscal year. Out of this

growth, Ps. 18,735 million corresponds to the increase in the average loan portfolio, accompanied

by the higher portfolio of government securities for Ps. 5,857 million.

The average yield on interest-earning assets was 25.78%, with an 88 basis points decrease during

the year, due to the lower average rate of 136 basis points of loans, partially offset by the

increase of 291 basis points in the yield on the portfolio of government securities.

The average of loans to the private sector for the fiscal year amounted to Ps. 77,807 million, 32%

higher than Ps. 59,072 million in the previous fiscal year. Out of the loans to the private sector

(taking into consideration final balances), the following growth is worth noting: Ps. 18,912 million

(51%) in credit cards, Ps. 6,448 million (40%) in promissory notes and Ps. 4,562 million in

overdrafts (114%).

This variation in loans was influenced by the “Credit Line for the Productive Investment” program

established by the Argentine Central Bank, which is aimed at financing specific-purposes and

characteristics working capital and investment projects. At fiscal year-end, the balance in force

amounted to Ps. 9,727 million, with an increase of Ps. 2,860 million (42%), as compared to the

balance as of the same date in the previous fiscal year. The lines that showed the highest variation

were promissory notes amounting to Ps. 1,527 million and purchase of checks amounting to Ps.

954 million.

As of December 31, 2015, the Bank’s estimated market share in the total loans to the private

sector, excluding the loans granted to the regional credit-card companies, was 9.60%, as

compared to 8.76% as of the same date in the previous year.

The average interest rate on total loans was 26.13%, compared to 27.49% in fiscal year 2014.

The average rate of Peso-denominated loans to the private sector was 27.23%, 162 basis points

lower than 28.85% for 2014. The determination of each rate for the fiscal year was influenced,

among other items, by the granting of the Credit Line for the Productive Investment (at a fixed

annual rate of 19.00% for the first tranche of 2015, 18.00% for the second tranche of 2015,

17.50% for the first tranche of 2014, 19.50% for the second tranche of 2014 and 15.25% for

the 2013 quota) and by Communiqué “A" 5590 of the Argentine Central Bank issued in June

2014, which determined limits to interest rates on certain loans. This rule remained effective until

December 17, 2015, date on which the Argentine Central Bank, through its Communiqué “A”

5853, eliminated the limit on rates referred to above.

The average position on government securities amounted to Ps. 14,616 million, higher than the

Ps. 8,760 million recorded in fiscal year 2014. This was the result of a Ps. 4,185 million increase


in the average position on Peso-denominated government securities and a Ps. 1,671 million

increase in the average position on government securities in U.S. Dollars.

The increase in the average position of Peso-denominated government securities was mainly due

to higher balances of securities issued by the Argentine Central Bank (Lebacs) and, to a lesser

extent, investments made in provincial (Buenos Aires and Neuquén, among others) treasury bills

and debt securities.

The higher average position in U.S. Dollars was mainly due to the holding of Lebacs, as a result of

the placement made during the fiscal year as a result of the Argentine Central Bank’s regulation

whereby the subscription of these bills is allowed based on time deposits in foreign currency

raised.

The average yield on government securities was 24.07% during the fiscal year, 291 basis points

higher than 21.16% in fiscal year 2014, as a consequence of a higher average rate both in Pesos

and U.S. Dollars.

In this regard, the average rate in Pesos in 2015 was 27.88%, increasing 389 basis points, as

compared to 23.99% for 2014, whereas the rate of U.S. Dollars-denominated government

securities was 8.47%, 513 basis points above 3.34% for fiscal year 2014, mainly due to the yield

on provincial debt securities and treasury bills.

The average portfolio of “Other Interest-Earning Assets” amounted to Ps. 2,382 million, 5% lower

than the Ps. 2,517 million recorded in fiscal year 2014, whereas the average rate of such item

was 24.90%, 164 basis points lower, as compared to 26.54% in the previous fiscal year, as a

result of the decrease of 170 basis points in the rate of Peso-denominated transactions.

The category “Other Financial Income” recorded a Ps. 51 million increase, mainly influenced by the

higher income from forward transactions in foreign currency, which totaled Ps. 917 million as of

fiscal year-end, as compared to Ps. 830 million for the previous fiscal year. In fiscal year 2014,

this item included a gain on quotation differences amounting to Ps. 13 million. It is made up of a

gain amounting to Ps. 241 million from foreign exchange brokerage activities and a loss amounting

to Ps. 228 million due to the valuation of the net foreign currency position. For the fiscal year,

there was a loss on the quotation differences, which is disclosed in “Other Financial Expenses”.

Financial Expenses

Financial Expenses


Interest on Deposits 8,694 6,577 3,780

Negotiable Obligations 1,846 1,485 869

Contributions and Taxes 2,111 1,480 1,009

Others (1) 751 779 512

Total 13,402 10,321 6,170

(1) Including interest accrued on liabilities resulting from financial brokerage with international banks and entities, premiums payable

on repurchase agreements and, during fiscal years 2015 and 2013, gain (loss) on quotation differences.

Financial expenses for the fiscal year amounted to Ps. 13,402 million, showing a 30% increase

when compared to the Ps. 10,321 million recorded in 2014.

The variation was the result of a 27% increase in the average balance of interest-bearing liabilities,

whereas the rate was kept at similar levels, with a 12 basis points increase during the year.

Average interest-bearing liabilities amounted to Ps. 66,071 million, compared to Ps. 52,081 million

in fiscal year 2014. This variation was mainly due to the Ps. 12,546 million increase in total


interest-bearing deposits (savings account and checking account), which amounted to Ps. 52,961

million as of fiscal year-end, whereas it amounted to Ps. 40,415 million as of the previous fiscal

year, and a Ps. 1,484 million increase in the average balance of debt securities, which amounted

to Ps. 10,460 million, as compared to Ps. 8,976 million in the previous fiscal year.

Of the total average interest-bearing deposits, Ps. 48,130 million were Peso-denominated

deposits, and Ps. 4,831 million were U.S. Dollar-denominated, compared to Ps. 37,140 million and

Ps. 3,276 million, respectively, in fiscal year 2014. Average deposits in Pesos grew 30%, with a

37% increase in deposits in savings accounts and a 27% increase in time deposits. Average

deposits in U.S. Dollars increased 47% during the fiscal year, with a 70% increase in deposits in

savings accounts and a 29% increase in time deposits. Part of this growth is explained by the

evolution of the exchange rate during the period, since the U.S. Dollar exchange rate experienced

a 52% increase during the year.

Considering only private-sector deposits in checking and savings accounts and time deposits raised

by the Bank, the estimated deposit market share of the Bank in the Argentine financial system

decreased from 9.65% as of December 31, 2015, to 9.06% as of December 31, 2014.

The average rate of the time deposit stands out of the total interest-bearing deposits (savings

accounts and time deposits), which stood at 22.28% during the fiscal year, 48 basis points higher

than that noted in the previous fiscal year. The evolution of the time deposit rate was influenced

by Argentine Central Bank’s regulations, which established minimum rates for raising Peso-

denominated time deposits, the amounts of which do not exceed certain values.

Peso-denominated interest-bearing deposits accrued an average rate of 17.77%, similar to the

17.70% rate for fiscal year 2014. In turn, the rate of U.S. Dollar-denominated interest-bearing

deposits was 1.24%, 17 basis points higher than the average rate of 1.07% in fiscal year 2014.

The average balance of debt securities was Ps. 10,460 million, Ps. 1,484 million higher than the

Ps. 8,976 million for the previous fiscal year. This variation was mainly related to the negotiable

obligations issued by Tarjeta Naranja, Tarjetas Cuyanas, CFA S.A. and Grupo Financiero Galicia,

and the variation in the U.S. Dollar during the period, offset by the amortizations made during the

year.

The average rate for debt securities in fiscal year 2015 was 17.65%, while in the previous fiscal

year it had been 16.54%, mainly due to the increase in the interest coupon of Banco Galicia’s

negotiable obligations that accrue a floating interest rate linked to the evolution of private Badlar.

The average balance of the “Other Interest-Bearing Liabilities” caption was Ps. 2,650 million, with

an average rate of 20.34% while, for fiscal year 2014, the average balance amounted to Ps.

2,689 million and the average rate was 19.19%. This caption mainly includes Peso- and U.S.

Dollar-denominated debt with domestic and international banks and entities, and Peso- and U.S.

Dollar-denominated obligations in connection with repurchase agreement transactions of

government securities.

The item “Other Financial Expenses” amounted to Ps. 751 million, showing a Ps. 28 million (4%)

decrease. In the fiscal year, this item includes a gain (loss) on quotation differences amounting to

Ps. 188 million. It was made up of a loss amounting to Ps. 538 million due to the valuation of the

net foreign currency position and a gain of Ps. 350 million from foreign exchange brokerage

activities. In fiscal year 2014, there was a gain on the quotation differences, which is disclosed in

“Other Financial Income”.

Net Financial Income


Net financial income for the fiscal year amounted to Ps 12,442 million, and the corresponding

financial margin was 13.12%; while in fiscal year 2014 the corresponding figures were Ps. 9,539

million and 13.56%, respectively.

The net income for the fiscal year (excluding the gain (loss) on quotation differences and the gain

(loss) on forward transactions) amounted to Ps. 11,712 million, compared to a Ps. 8,960 million

profit in the previous fiscal year, determining a 12.35% financial margin for this fiscal year, in

comparison to 12.74% the previous fiscal year. This variation was the result of a drop in the

spread (defined as the difference between the average nominal interest rate on interest-earning

assets and the average nominal interest rate on interest-bearing liabilities), which stood at 9.13%

during the fiscal year, as compared to 10.13% in fiscal year 2014, influenced by the lower

accrued rate on loans (135 basis points), partially offset by a higher volume of transactions.


Interest-Earning Assets – Net Yield and Spread (*)

December 31, In millions of Pesos, except for rates (%) 2015 2014 2013

Total Average Interest-Earning Assets

Pesos 88,107 65,665 50,736

U.S. Dollars 6,698 4,684 3,424

Total 94,805 70,349 54,160

Net Interest Earned

Pesos 13,887 10,687 7,768

U.S. Dollars (443) (540) (308)

Total 13,444 10,147 7,460

Net Yield on Interest-Earning Assets (1) (%)

Pesos 15.76 16.28 15.31

U.S. Dollars (6.61) (11.53) (9.00)

Weighted-Average Yield 14.18 14.42 13.77

Interest Spread, Nominal Basis (2) (%)

Pesos 8.44 9.41 10.30

U.S. Dollars (0.91) (2.79) (1.56)

Weighted-Average Yield 9.13 10.13 10.43

(*) Interest includes CER adjustment. (1) Net Interest earned divided by average Interest-earning assets. See the “Yield on Interest-Earning Assets and Interest-Bearing

Liabilities” table. (2) Interest spread, nominal basis, is the difference between the average nominal interest rate on interest-earning assets and the

average nominal interest rate on interest-bearing liabilities.


Consolidated Average Nominal Yields and Rates for Assets and Liabilities (*)

In millions of Pesos, except for rates (%)

December 31, 2015 Pesos U.S. Dollars Total

Average

Balance

Interest

Earned/

Paid

Average

Nominal

Rate

Average

Balance

Interest

Earned/

Paid

Average

Nominal

Rate

Average

Balance

Interest

Earned/

Paid

Average

Nominal

Rate Assets

Government Securities 11,746 3,275 27.88 2,870 243 8.47 14,616 3,518 24.07

Loans

Private Sector 74,081 20,173 27.23 3,710 155 4.18 77,791 20,328 26.13

Public Sector 16 4 25.00 - - - 16 4 25.00

Total Loans 74,097 20,177 27.23 3,710 155 4.18 77,807 20,332 26.13

Others 2,264 588 25.97 118 5 4.24 2,382 593 24.90

Interest-Earning Assets 88,107 24,040 27.29 6,698 403 6.02 94,805 24,443 25.78

Cash and Gold 10,112 - - 7,272 - - 17,384 - -

Equity Investments in Other Companies 2,369 - - 392 - - 2,761 - -

Other Assets 10,057 - - 904 - - 10,961 - -

Allowances (3,175) - - (52) - - (3,227) - -

Total Assets 107,470 - - 15,214 - - 122,684 - -


Deposits

Checking Accounts - - - - - - - - -

Savings Accounts 11,932 28 0.23 2,496 - - 14,428 28 0.19

Time Deposits and Rescheduled

Deposits 36,198 8,526 23.55 2,335 60 2.57 38,533 8,586 22.28

Total Interest-Bearing Deposits 48,130 8,554 17.77 4,831 60 1.24 52,961 8,614 16.26

Debt Securities 4,248 1,103 25.97 6,212 743 11.96 10,460 1,846 17.65

Other Interest-Bearing Liabilities 1,489 496 33.31 1,161 43 3.70 2,650 539 20.34

Total Interest-Bearing Liabilities 53,867 10,153 18.85 12,204 846 6.93 66,071 10,999 16.65

Checking Accounts 19,850 - - 1,062 - - 20,912 - -

Other Liabilities 20,778 - - 1,858 - - 22,636 - -

Minority Interest 860 - - - - - 860 - -

Shareholders’ Equity 12,205 - - - - - 12,205 - -

Total Liabilities and Shareho ders’ Equity 107,560 - - 15,124 - - 122,684 - -

Spread and Net Yield (%)

Spread 8.44 (0.91) 9.13

Cost of Funds of Interest-Earning

Assets 11.52 12.63 11.60

Net Yield on Interest-Earning Assets 15.76 (6.61) 14.18

(*) Interest earned/paid includes CER adjustment.





Average

Balance

Interest

Earned/

Paid

Average

Nominal

Rate

Average

Balance

Interest

Earned/

Paid

Average

Nominal

Rate

Average

Balance

Interest

Earned/

Paid

Average

Nominal

Rate Assets

Government Securities 7,561 1,814 23.99 1,199 40 3.34 8,760 1,854 21.16

Loans

Private Sector 55,704 16,072 28.85 3,368 164 4.87 59,072 16,236 27.49

Public Sector - - - - - - - - -

Total Loans 55,704 16,072 28.85 3,368 164 4.87 59,072 16,236 27.49

Others 2,400 664 27.67 117 4 3.42 2,517 668 26.54


Cash and Gold 7,838 - - 6,499 - - 14,337 - -


Other Assets 7,451 - - 325 - - 7,776 - -

Allowances (2,550) - - (59) - - (2,609) - -

Total Assets 80,527 - - 11,983 - - 92,510 - -


Deposits

Checking Accounts - - - 1 - - 1 - -

Savings Accounts 8,722 20 0.23 1,464 - - 10,186 20 0.20


Deposits 28,418 6,555 23.07 1,811 35 1.93 30,229 6,590 21.80


Debt Securities 3,110 811 26.08 5,866 674 11.49 8,976 1,485 16.54

Other Interest-Bearing Liabilities 1,492 477 31.97 1,197 39 3.26 2,689 516 19.19


Checking Accounts 14,432 - - 686 - - 15,118 - -




Tota Liabi ities and Shareho ders’ Equity 80,135 - - 12,375 - - 92,510 - -


Spread 9.41 (2.79) 10.13

Cost of Funds of Interest-Earning Assets 11.97 15.97 12.24







Average

Balance

Interest

Earned/

Paid

Average

Nominal

Rate

Average

Balance

Interest

Earned/

Paid

Average

Nominal

Rate

Average

Balance

Interest

Earned/

Paid

Average

Nominal

Rate Assets

Government Securities 3,755 568 15.13 401 27 6.80 4,156 595 14.33

Loans

Private Sector 44,965 11,368 25.28 2,940 138 4.69 47,905 11,506 24.02

Public Sector 7 - - - - - 7 - -

Total Loans 44,972 11,368 25.28 2,940 138 4.69 47,912 11,506 24.01

Others 2,009 364 18.14 83 7 8.78 2,092 371 17.77


Cash and Gold 6,344 - - 3,467 - - 9,811 - -


Other Assets 5,671 - - 625 - - 6,296 - -

Allowances (2,059) - - (73) - - (2,132) - -

Total Assets 62,138 - - 7,706 - - 69,844 - -


Deposits

Checking Accounts - - - 1 - - 1 - -

Savings Accounts 7,140 15 0.20 938 - - 8,078 15 0.18


Deposits 21,782 3,755 17.24 1,475 17 1.15 23,257 3,772 16.22


Debt Securities 2,153 430 19.96 4,198 440 10.48 6,351 870 13.70

Other Interest-Bearing Liabilities 1,426 332 23.28 666 23 3.45 2,092 355 16.97


Checking Accounts 11,264 - - 464 - - 11,728 - -




Tota Liabi ities and Shareho ders’ Equity 60,989 - - 8,855 - - 69,844 - -


Spread 10.30 (1.56) 10.43

Cost of Funds of Interest-Earning

Assets 8.93 14.02 9.25



Provision for Losses on Loans and Other Receivables

Provisions for loan losses amounted to Ps. 2,214 million, Ps. 197 million (8%) lower than those in

the previous fiscal year. The decrease was related to a better behavior in the evolution of arrears,

both the business portfolio and the individuals’ portfolio, mitigated by higher regulatory charges on

the portfolio in normal situation as a result of the increase in the volume of receivables.

For further information on the asset quality of the portfolio, see “—Risk Management—Credit

Risk.”


Net Income from Services

The table below shows the evolution of the main components that make up net income from

services:

Net Income from Services


Credit Cards 7,263 5,376 4,097

Deposits 1,960 1,341 879

Credit-related Fees 314 227 289

Values for Collection 276 182 105

Foreign Trade 214 180 128

Safe Deposit Boxes 193 167 124

CFA 250 137 122

Collections 169 126 87

Financial Fees 137 97 82

Cash Management 91 69 55

Transportation of Valuables 53 59 43

Others (1) 551 345 223

Total Income 11,471 8,306 6,234

Total Expenses 3,634 2,607 1,995

Net Income from Services 7,837 5,699 4,239

(1) It includes, among others, fees from investment banking activities and asset management.

Net income from services amounted to Ps. 7,837 million, 38% higher than the Ps. 5,699 million

recorded in fiscal year 2014. The evolution of business activity and the rise in prices (complying

with the procedures set forth by the Argentine Central Bank’s regulations related to individuals)

account for the increases noted.

The most significant increases took place in fees related to credit cards (35%), deposit accounts

(46%) and values for collection (52%). The increase in CFA’s income from services (82%) is

mainly related to higher fees related to the credit cards product and the accounts offered to its

retired customers.

Banco Galicia’s total deposit accounts amounted to 3.6 million as of December 31, 2015, 20%

higher than the same period the previous year.

Banco Galicia’s income from credit and debit card transactions, on an individual basis, amounted

to Ps. 3,214 million, a 45% increase over the Ps. 2,219 million recorded in the previous fiscal

year. This higher income was attributable not only to the greater number of credit cards managed,

but also to the greater average purchases made with such cards during the year. The total number

of credit cards managed by Banco Galicia (excluding those managed by the regional credit-card

companies and CFA) increased 19%, reaching 3.4 million as of December 31, 2015, in

comparison with 2.9 million as of December 31, 2014.

Income from services corresponding to the regional credit-card companies was Ps. 4,049 million,

28% higher than Ps. 3,157 million in 2014. This variation was due to the increase in the

purchases for the fiscal year, together with an increase in the number of credit cards. These

companies managed 10 million cards as of December 31, 2015, increasing by 12% as compared

to December 31, 2014.


Credit Cards

Number of credit cards, except for purchases December 31,

2015 2014 2013

Visa 2,088,236 1,750,960 1,586,344

“Gold” 459,767 395,732 324,903

International 1,138,234 906,701 826,297

National 57,224 68,980 90,245

“Business” 99,155 85,039 71,307

“Corporate” 3,271 3,241 3,139

“Platinum” 330,585 291,267 270,453

Galicia Rural 17,548 17,107 15,476

MasterCard 264,487 126,880 107,235

“Gold” 78,091 43,824 34,935

Mastercard 166,049 82,652 71,779

Argencard 326 404 521

“Platinum” 13,534 - -

“Black” 6,487 - -

American Express 1,059,707 986,962 810,780

“Gold” 329,011 307,072 238,088

International 465,815 427,932 345,380

“Platinum” 264,881 251,958 227,312

Regional Credit-card Companies 9,973,612 8,879,717 8,270,150

Visa 4,211,135 3,646,229 3,164,358

Mastercard 660,534 537,947 519,342

American Express 47,487 41,307 34,247

Regional Brands (1) 5,054,456 4,654,234 4,552,203


Visa 145,361 155,228 93,881

Mastercard 14,074 15,702 7,531

Total 13,563,025 11,932,556 10,891,397

Total Amount of Purchases (in Millions of Pesos) 146,508 101,814 75,925

(1) It corresponds to Tarjeta Naranja S.A., Tarjetas Cuyanas S.A. and La Anónima.

Expenses from services increased by 39%, from Ps. 2,607 in 2014 to Ps. 3,634 million, mainly as

a result of higher expenses related to credit and debit card transactions and the customer’s loyalty

creation program, together with higher gross income taxes.

Administrative Expenses

The following table shows the components of administrative expenses for the fiscal year 2015 and

the two previous fiscal years:

Administrative Expenses


Salaries and Social Security Contributions 6,150 4,549 3,681

Personnel Services 262 150 128

Directors’ and Syndics' Fees 111 85 64

Advertising and Publicity 545 414 383

Electricity and Communications 308 249 217

Expenses related to Bank Premises and Equipment (Depreciation

Charges and Leases) 553 466 376

Taxes 1,219 851 608

Others 3,757 2,457 1,971

Total Administrative Expenses 12,905 9,221 7,428


In 2015, administrative expenses amounted to Ps. 12,905 million, 40% higher from the Ps. 9,221

million recorded in the previous fiscal year.

Salaries, social security contributions and personnel services increased 37%, from Ps. 4,699

million in 2014 to Ps. 6,412 million at fiscal year-end, mainly due to the salary increase agreed

upon with unions.

The remaining administrative expenses amounted to Ps. 6,493 million in the fiscal year, reflecting

a 44% increase from the Ps. 4,522 million recorded in the previous fiscal year. This increase

primarily resulted from the evolution of the costs related to the different services rendered by

Grupo Financiero Galicia, together with the higher amortization of organization expenses for Ps.

303 million (91%) because the Bank’s investment in the “SAP Core Banking” system began being

amortized in December 2014.

Income (Loss) from Equity Investments

During the fiscal year, income from equity investments in other companies amounted to Ps. 100

million, 53% lower than that for the previous fiscal year, during which the profit generated by the

transfer of the Bank’s equity investment in Banelco S.A. to Visa Argentina S.A. had been

recorded, under the framework of the project of integration of those companies. Additionally, as of

June 30, 2015, the amortization of the negative goodwill resulting from the purchase of CFA and

Cobranzas y Servicios S.A. was completed.

Income (Loss) from Insurance Activities

The breakdown of income (loss) from insurance activities as of the referred dates was as follows:

Income (Loss) from Insurance Activities (*)


Premiums and Surcharges Accrued 2,516 1,688 1,274

Claims Accrued (358) (235) (164)

Surrenders (5) (4) (4)

Life and Ordinary Annuities (4) (4) (3)

Underwriting and Operating Expenses (350) (219) (199)

Other Income and Expenses 2 12 1

Total 1,801 1,238 905

(*) Not including administrative expenses and taxes.

Income (loss) from the commercialization of insurance (excluding administrative expenses and

taxes, net of eliminations related to related-party transactions) totaled Ps. 1,801 million as of fiscal

year-end, 46% higher than Ps. 1,238 million for fiscal year 2014. This result was mainly due to

the increase in the volume of premiums written, primarily as a consequence of the evolution of the

commercialization of property and life insurance. In this regard, in 2015, Galicia Seguros S.A.

achieved total premiums and surcharges accrued amounting to Ps. 2,516 million, obtaining an

interannual increase of about 49%.

In 2015, the loss experience remained at similar levels to those presented in the previous year.

During 2015, sales reached Ps. 709 million of annualized premiums, obtaining an increase of about

39%, as compared to 2014.

Miscellaneous Income (Loss), Net

Miscellaneous net income recorded income of Ps. 443 million for the fiscal year, compared to

income of Ps. 503 million for the previous fiscal year.


The lower profit for Ps. 60 million was due to the increase in provisions for loans losses of

miscellaneous receivables and other allowances, mainly offset by higher income (loss) related to

margin requirements of repurchase agreement transactions and yields generated on funds of losses

of credit cards (Visa, Mastercard, American Express and Banelco).

Income Tax

The income tax charge during the fiscal year was Ps. 2,801 million, thus accounting for an

increase of Ps. 809 million as compared to fiscal year 2014.

RISK MANAGEMENT

The tasks related to risk information and internal control of each of the companies controlled by

Grupo Financiero Galicia are defined and carried out, rigorously, by each of them.

Apart from the applicable domestic regulations, Grupo Financiero Galicia, in its capacity as a listed

company on the markets of the United States of America, complies with the certification of its

internal controls pursuant to Section 404 of the Sarbanes Oxley Act (SOX). Corporate risk

management is monitored by the Audit Committee, which as well gathers and analyzes the

information submitted by the main controlled companies.

As regards risks, Banco Galicia assumes a policy that takes into account several business and

operating aspects following the main guidelines of internationally renowned standards.

This is the vision of the internal structure, duties and roles are defined in their hierarchies and

resources are invested in monitoring and optimizing the risk management.

The Risk Management Committee is the body in charge of defining, assessing and controlling the

risks taken by the Bank and its subsidiaries.

The management of the different risks is decentralized in the Divisions that are directly responsible

for each of them.

The Risk Management Division is mainly responsible for actively and integrally monitoring and

managing the different risks Banco Galicia and its subsidiaries are exposed to, among other

functions.

Credit Risk

Credit risk stems from the possible losses that can be sustained due to the total or partial non-

compliance with financial obligations taken on both with Banco Galicia and with consumption

financing affiliated companies by its customers or else counterparties.

The credit approval and credit risk analysis of the Bank and its subsidiaries is a centralized process

based on the concept of opposition of interests. This is achieved through the existing division

among the risk management, credit and origination functions both in retail and wholesale

businesses. This allows an ongoing and efficient monitoring of the quality of assets, a proactive

management of problem loans, aggressive write-offs of uncollectible loans, and a conservative

policy on allowances for loan losses.

Apart from that, it includes the follow-up of the models for measuring the portfolio risk at the

operation and customer levels, facilitating the detection of problem loans and the losses associated


therewith, what in turn allows the early detection of situations that could entail some degree of

portfolio deterioration and provides appropriate protection of the Bank’s assets.

Within the framework of the Risk Management Committee (“CAR”, as per its initials in Spanish),

the Board of Directors approves the strategies, policies, procedures and controls related to the

comprehensive management of the Bank’s risks. In turn, the Wholesale Risk Management Division,

Retail Risk Management and Consumption Division verify compliance and assess credit risk on a

continuous basis.

As an outstanding aspect we can mention that credit granting policies for retail banking and

consumption financing companies focus on automatic granting processes. These are based on

behavior analysis models. Additionally, Banco Galicia is strongly geared towards obtaining

portfolios with direct payroll deposit, which statistically have a better compliance behavior when

compared to other types of portfolios.

As for the wholesale banking, credit granting is based on analyses conducted on credit, cash-flow,

balance sheet, capacity of the applicant. These are supported by statistical rating models.

The Bank has a review-by-sector policy, which determines the levels of review for the economic

activities belonging to the private-sector portfolio according to the concentration they show with

regard to the Bank’s total credit and/or computable regulatory capital (RPC, as per its initials in

Spanish).

Wholesale Risk Management Division, Retail Risk Management and Consumption Division also

constantly monitor their portfolio through different indicators (asset quality of the loan portfolio,

the coverage of the non-accrual portfolio with allowances, non-performance, roll rates, etc.), as

well as the classification and concentration thereof (through maximum ratios between the

exposure to each customer, its own computable capital (“RPC”) or regulatory capital, and that of

each customer). The loan portfolio classification, as well as its concentration control, are carried

out following the regulations provided for by the Argentine Central Bank.

Loan Portfolio

Breakdown of the Loan Portfolio


Principal and Interest

Non-financial Public Sector - - -

Local Financial Sector 762 193 633

Non-Financial Private Sector and Residents Abroad (1)

Overdrafts 8,549 3,987 3,349

Promissory Notes 22,752 16,304 13,323

Mortgage Loans 2,099 1,661 1,803

Collateral Loans 487 500 481

Personal Loans 9,259 6,996 8,051

Credit Cards 56,260 37,348 27,389

Placements in Banks Abroad 232 261 586

Others 692 1,337 1,237

Accrued Interest, Adjustment and Quotation Differences Receivable 1,407 969 827

Documented Interest (597) (348) (271)

Total (1) 101,902 69,208 57,408

Allowance for Loan Losses (3,560) (2,615) (2,129)

Total Loans 98,342 66,593 55,279

Loans with Guarantees

With Preferred Guarantees (2) 2,988 2,695 2,433

Other Guarantees 13,508 9,463 8,257


Total Loans with Guarantees 16,496 12,158 10,690

(1) Categories of loans above include:

- Overdrafts: short-term obligations drawn on by customers through overdrafts. - Promissory notes: endorsed promissory notes, debentures and other promises to pay signed by one borrower or group of borrowers

and factored loans. - Mortgage loans: loans granted to purchase or improve real estate and collateralized by such real estate, and commercial loans secured

by a real estate mortgage. - Collateral loans: loans secured by collateral (such as cars or machinery) other than real estate. - Personal loans: loans to individuals. - Credit-Card loans: loans granted through credit cards to credit card holders. - Placements in banks abroad: short-term loans to banks abroad and short-term loans granted by Galicia Uruguay to international banks

outside Uruguay. - Other loans: loans not included in other categories.

(2) Preferred guarantees include mortgages on real estate property or pledges on movable property, pledges of Argentine government

securities, or gold or cash collateral.

As of December 31, 2015, Banco Galicia’s loan portfolio before allowances for loan losses

amounted to Ps. 101,902 million, a 47% increase when compared to the previous fiscal year-end.

Loans by Type of Borrower

December 31, In millions of Pesos, except for percentages 2015 % 2014 % 2013 %

Large Corporations 13,619 13.4 8,590 12.4 6,508 11.3

Small and Medium-Sized Companies 29,022 28.4 20,514 29.6 18,064 31.5

Total Loans to Corporations 42,641 41.8 29,104 42.0 24,572 42.8

Individuals 58,267 57.2 39,649 57.3 31,988 55.7

Financial Sector (1) 994 1.0 455 0.7 848 1.5

Non-financial Public Sector - - - - - -

Total (2) 101,902 100.0 69,208 100.0 57,408 100.0

(1) It includes domestic and international financial sector. (2) Before allowances for loan losses.

Loans to the private sector before allowances increased by 47%, as compared to the prior fiscal

year-end, as a result of an increase both in individuals (47%), in PyMES (small- and medium-sized

companies) (41%) and in large corporations (59%).

Loans by Economic Activity December 31, In millions of Pesos, except for percentages 2015 % 2014 % 2013 %

Financial Sector (1) 994 1.0 455 0.7 848 1.5

Services

Non-financial Public Sector - - - - - -

Communications, Transportation, Health and

Others 5,084 5.0 2,886 4.2 2,882 5.0

Electricity, Gas, Water Supply and Sewage 160 0.2 216 0.3 260 0.5

Other Financial Services 553 0.5 366 0.5 231 0.4

Total Services 5,797 5.7 3,468 5.0 3,373 5.9

Primary Production Sector

Agriculture and Livestock 11,342 11.1 8,178 11.8 7,160 12.5

Fishing, Forestry and Mining 1,956 1.9 1,459 2.1 478 0.8

Total Primary Production Sector 13,298 13.0 9,637 13.9 7,638 13.3

Consumption 59,012 57.9 39,747 57.4 31,720 55.3

Retail Trade 3,287 3.3 2,237 3.2 2,326 4.0

Wholesale Trade 5,450 5.3 3,699 5.4 3,075 5.4

Construction 1,035 1.0 709 1.0 707 1.2

Manufacturing Sector

Food and Beverage 3,499 3.4 2,943 4.3 2,303 4.0

Transportation Materials 2,783 2.7 996 1.4 963 1.7

Chemicals and Oil 2,712 2.7 2,269 3.3 1,557 2.7

Other Manufacturing Industries 4,035 4.0 3,048 4.4 2,898 5.0

Total Manufacturing Sector 13,029 12.8 9,256 13.4 7,721 13.4

Others - - - - - -

Total (2) 101,902 100.0 69,208 100.0 57,408 100.0

(1) It includes domestic and international financial sector.


(2) Before allowances for loan losses.

Consumer loans still account for the greater part of the loan portfolio, which as of the fiscal year-

end represented 57.9% of total loan portfolio.

As for business activities, the most significant sectors were those of the Primary Production,

Manufacturing Industry and Retail and Wholesale Trade, with a total portfolio share of 13.0%,

12.8% and 8.6%, respectively.

The most significant growths were shown in consumer loans, the manufacturing industry and

agriculture and livestock, with increases of 48%, 41% and 39%, respectively.


Asset Quality of the Loan Portfolio

Analysis of the Asset Quality of Loan Portfolio

December 31, In millions of Pesos, except for ratios 2015 2014 2013

Total Loans (1) 101,902 69,208 57,408

Non-accrual Loan Portfolio

With Preferred Guarantees 106 50 39

With Other Guarantees 103 59 58

Without Guarantees 2,958 2,363 1,954

Total Non-Accrual Loan Portfolio 3,167 2,472 2,051

Past-due Loan Portfolio

Non-financial Public Sector - - -

Local Financial Sector - - -

Non-Financial Private Sector and Residents Abroad

Overdrafts 188 169 150

Promissory Notes 192 121 76

Mortgage Loans 45 12 28

Collateral Loans 8 9 5

Personal Loans 304 262 243

Credit Cards 1,693 1,200 1,003

Others 74 33 38

Total Past-Due Loan Portfolio 2,504 1,806 1,543

Past-due Loan Portfolio




Total Past-Due Loan Portfolio 2,504 1,806 1,543

Allowance for Loan Losses 3,560 2,615 2,129

Ratios (%)

Past-due Loans as a Percentage of Total Loans 2.46 2.61 2.69

Past-due Loans with Preferred Guarantees as a Percentage of Total Loans 0.06 0.06 0.06

Past-due Loans with Other Guarantees as a Percentage of Total Loans 0.10 0.05 0.08

Past-due Loans without Guarantees as a Percentage of Total Loans 2.30 2.50 2.55

Non-accrual Loans as a Percentage of Total Loans 3.11 3.57 3.57

Non-accrual Loans as a Percentage of Total Loans (excluding Interbank Loans) 3.12 3.59 3.62

Non-accrual Loans as a Percentage of Loans to the Private Sector 3.11 3.57 3.57

Allowance for Loan Losses as a Percentage of Total Loans 3.49 3.78 3.71

Allowance for Loan Losses as a Percentage of Total Loans (excluding Interbank

Loans) 3.50 3.79 3.76

Allowances for Loan Losses as a Percentage of Non-Accrual Portfolio 112.41 105.78 103.80

Non-Accrual Portfolio with Guarantees as a Percentage of Non-Accrual Portfolio 6.60 4.41 4.73

Non-Accrual Portfolio as a Percentage of Past-due Portfolio 126.48 136.88 132.92


The non-accrual portfolio as a percentage of total loans was 3.1% as of fiscal year-end, which

represents an improvement when compared to 3.6% in the previous fiscal year.

The coverage of the non-accrual loan portfolio with allowances increased from 105.78% as of

2014 fiscal year-end to 112.41% as of 2015 fiscal year-end.


Classification of the Loan Portfolio


December 31, 2015 2014 2013

Amounts

Not Yet

Due

Amounts

Past Due Total Amounts

Not Yet

Due

Amounts

Past Due Total Amounts

Not Yet

Due

Amounts

Past Due Total

Normal Situation 97,232 - 97,232 65,279 - 65,279 54,119 - 54,119

With Special Follow-up and Low

Risk 1,503 - 1,503 1,457 - 1,457 1,238 - 1,238

With Problems and Medium Risk 362 521 883 339 439 778 311 415 726

High Risk of Insolvency and High

Risk 301 860 1,161 327 1,049 1,376 197 724 921

Uncollectible - 1,118 1,118 - 315 315 - 402 402

Uncollectible due to Technical

Reasons - 5 5 - 3 3 - 2 2

Total Loans (1) 99,398 2,504 101,902 67,402 1,806 69,208 55,865 1,543 57,408

Total Non-Accrual Loan Portfolio (2) 663 2,504 3,167 666 1,806 2,472 508 1,543 2,051

(1) Before allowances for loan losses. (2) Non-accrual loan portfolio is defined as the loan portfolio classified in the last four categories of the loan classification.

Provisions for Loan Losses

In millions of Pesos, except for ratios December 31,

2015 2014 2013

Total Loans, Average (1) 77,832 59,094 47,964

Allowance for Loan Losses at the Beginning of the Fiscal Year 2,615 2,129 1,732

Changes in the Allowance for Loan Losses

Allowances for Loan Losses Made during the Fiscal Year 2,148 2,327 1,701

Reversals of Allowances for Loan Losses - (1) -

Write-Offs (A) (1,203) (1,840) (1,304)

Allowance for Loan Losses at Fiscal Year-End 3,560 2,615 2,129

Provisions Charged to Income during Fiscal Year

Allowances for Loan Losses Made(2) 2,128 2,339 1,701

Direct Write-Offs, Net of Recoveries (B) (226) (181) (187)

Allowances for Loan Losses Reversed - (1) -

Net Charge to the Income Statement 1,902 2,157 1,514

Ratios (%)

Charges-Offs (-A+B) as a Percentage of Average Total Loans 1.26 2.81 2.33

Net Charge to the Income Statement as a Percentage of

Average Total Loans 2.44 3.65 3.16


(2) It includes quotation difference corresponding to Galicia Uruguay.

During 2015, the Bank established allowances for loan losses for Ps. 2,148 million.

Direct charges to the income statement, net of recoveries, represented a gain of Ps. 226 million.

The net charge to the income statement for the fiscal year was Ps. 1,902 million, representing

2.44% of the average loan portfolio for the fiscal year.

Charge-offs against allowances for loan losses were Ps. 1,203 million.


Composition of Allowances for Loan Losses per Type of Loan

December 31,

In millions of Pesos, except for percentages 2015 2014 2013

Amount % (1) % (2) Amount % (1) % (2) Amount % (1) % (2)

Non-financial Public Sector - - - - - - - - -

Local Financial Sector - - 0.75 - - 0.28 - - 1.10

Non-financial Private Sector and Residents

Abroad

Overdrafts 157 0.15 8.39 121 0.17 5.76 95 0.17 5.83

Promissory Notes 150 0.15 22.33 94 0.14 23.56 56 0.10 23.21

Mortgage Loans 33 0.03 2.06 13 0.02 2.40 11 0.02 3.14

Collateral Loans 7 0.01 0.48 5 0.01 0.72 3 - 0.84

Personal Loans 311 0.30 9.09 299 0.43 10.11 261 0.45 14.02

Credit Card Loans 1,295 1.27 55.21 759 1.10 53.96 676 1.18 47.71

Placements in Banks Abroad - - 0.23 - - 0.38 - - 1.02

Others 49 0.05 1.46 19 0.02 2.83 22 0.04 3.13

Unallocated 1,558 1.53 - 1,305 1.89 - 1,005 1.75 -

Total 3,560 3.49 100.00 2,615 3.78 100.00 2,129 3.71 100.00

(1) Allowances for loan losses as a percentage of total loans. (2) Loans charged in every line as a percentage of total loans.

Total Credit

Credit


Loan Portfolio Classification

Normal Situation 110,503 74,900 62,488

With Special Follow-up and Low Risk 1,528 1,507 1,254

With Problems and Medium Risk 894 792 748

High Risk of Insolvency and High Risk 1,172 1,392 930

Uncollectible 1,131 318 404

Uncollectible due to Technical Reasons 5 3 3

Total Loans (1) 115,233 78,912 65,827

Non-Accrual Loan Portfolio (2)




Total Non-Accrual Loan Portfolio 3,202 2,505 2,085

Allowance for Loan Losses 3,648 2,675 2,172

Ratios (%)

Allowance for Loan Losses

as a Percentage of Total Loans 3.17 3.39 3.30

Non-Accrual Loan Portfolio as a Percentage of Total Loans 2.78 3.17 3.17

Allowance for Loan Losses

as a Percentage of Non-Accrual Loan Portfolio 113.93 106.79 104.17

Non-Accrual Loan Portfolio with Guarantees

as a Percentage of Non-Accrual Loan Portfolio 6.81 4.71 4.84

(1) Before allowances for loan losses. (2) Non-accrual loan portfolio is defined as the loan portfolio classified in the last four categories of the loan classification.

In accordance with the Argentine Central Bank’s methodology for the preparation of the Statement

of Debtor’s Status, total credit is defined as the sum of loans, certain accounts under the balance

sheet heading “Other Receivables from Financial Brokerage” that represent credit transactions

(such as unlisted negotiable obligations), the “Receivables from Financial Leases” and the

memorandum accounts “Guarantees Granted” and “Unused Balances of Loans Granted”. Defined

in this way, Banco Galicia’s consolidated credit portfolio, including the portfolio of the regional

credit-card companies and that of CFA, amounted to Ps. 115,233 million as of fiscal year-end.


As of December 31, 2015, the ratio of the non-accrual loan portfolio to total credit was 2.8%,

which represented an improvement when compared to 3.2% in the previous fiscal year.

Furthermore, coverage of non-accrual loan portfolio with allowances was 113.9% as of fiscal

year-end, compared to the 106.8% in the previous fiscal year.

Financial Risks

Financial risk is a phenomenon inherent to the financial brokerage activity. The exposure to the

different financial risk factors is a natural circumstance that cannot be completely avoided without

affecting Banco Galicia’s long-term economic viability. However, the lack of management with

regard to risk exposures is one of the most significant short-term threats. Risk factors need to be

identified and managed within a specific policy framework that envisages the profile and the level

of risk the Bank’s Board of Directors has decided to take to achieve its long-term strategic goals.

The following risk factors subject to management and control have been identified:

Continuity and stability of the sources of funds (deposits, debt, credit lines, other sources of

funds).

Market price of financial assets and/or derivative instruments listed on stock exchanges.

Foreign currency exchange.

Fluctuation in lending and borrowing interest rates.

Credit risk from counterparties located in foreign jurisdictions. Regulatory restrictions on the remittance of financial instruments or else liquid funds to

counterparties from abroad to comply with obligations undertaken.

From this perspective, financial risk is defined as the possibility of sustaining losses due to

variations in the market price of listed financial assets and liabilities, fluctuations in market interest

rates, foreign currency exchange and changes in the Bank’s liquidity situation. Cross-border,

overseas foreign currency transfer risks and risk exposures in the Non-financial Public Sector are

included within financial risks.

Liquidity Risk

This risk has to do with not being able to meet contractual commitments and the operational

needs of the business without affecting market prices, attracting the attention of other market

players and compromising the counterparty’s credit quality.

Banco Galicia’s goal is to maintain an adequate level of liquid assets that allows it to meet

financial commitments at contractual maturity, take advantage of potential investment

opportunities and meet credit demand.

Liquidity risk management is carried out by applying an internal model that is subject to a periodic

review.

The liquidity policy sets forth limits that cover three areas of liquidity risk:

Liquidity in Terms of Stock: A level of management liquidity was established as the excess over

legal minimum cash requirements, taking into consideration the characteristics and behavior of

Banco Galicia’s different liabilities. The liquid assets that make up such liquidity were

determined as well.

Cash Flow Liquidity: gaps between the contractual maturities of consolidated financial assets

and liabilities are analyzed and monitored. There is a cap for the gap between maturities,

determined based on the gap accumulated against total liabilities permanently complied with

during the first year.


Concentration of Deposits: The concentration of deposits is regulated in terms of the ten

leading customers and the following fifty customers; and a maximum limit with regard to the

share in deposits is determined individually.

With the purpose of monitoring and regulating possible concentrations of time deposits by entities

decentralized from the national government, the Bank decided to determine specific limits for these

transactions, independently from the rest of Banco Galicia’s customers. In case circumstantial

excesses over the concentration limits determined occur, these lead to higher requirements with

regard to liquidity in terms of stock.

Furthermore, the liquidity policy is supplemented by the Liquidity Contingency Plan that

contemplates a set of early warnings to monitor liquidity evolution and possible business actions in

order to obtain extraordinary liquid resources to address the above-mentioned situation.

Additionally, a stress test program was designed to regularly evaluate the liquidity capacity

specified by the policy, in order to address different scenarios, defined as extreme, according to

historical experience.

Liquidity Management (on an Individual Basis)

As of December 31, 2015, the liquidity structure of the Bank was as follows:

Liquidity (Banco Galicia, on an unconsolidated basis)

In millions of Pesos December 31, 2015

Legal Requirements 19,141.5

Management Liquidity 18,284.0

Total Liquidity (1) 37,425.5

(1) It does not include cash and due from banks of controlled companies.

Legal requirements correspond to the minimum cash requirements for Peso- and U.S. Dollar-

denominated assets and liabilities as per the rules and regulations of the Argentine Central Bank.

The assets computable for compliance with this requirement are the balances of the Peso- and

U.S. Dollar-denominated deposit accounts at the Argentine Central Bank and the escrow accounts

held at the Argentine Central Bank in favor of clearing houses.

Management liquidity, defined as a percentage over deposits and other liabilities, is made up of the

following items: Lebac, overnight placements in banks abroad, net short-term interbank loans (call

loans), technical cash and placements at the Argentine Central Bank in excess of the necessary

items to cover minimum cash requirements.

Liquidity Gaps

To analyze the flows and as a supplement to the above-mentioned analysis of liquidity in terms of

stock, the “Liquidity Gap” is prepared, showing the mismatches resulting from the contractual

maturity of consolidated financial assets and liabilities.


Liquidity Gap

December 31, 2015

In millions of Pesos Less than

One Year 1-5 Years 5-10 Years

Over 10

Years Total

Assets

Cash and Due from Banks 7,721 - - - 7,721

Argentine Central Bank – Escrow Accounts 24,645 - - - 24,645

Overnight Placements in Banks Abroad 232 - - - 232

Loans – Public Sector 389 20 - - 409

Loans – Private Sector 85,125 11,684 138 9 96,956

Government Securities 15,030 - - - 15,030

Negotiable Obligations and Corporate Securities 451 1,005 15 - 1,471

Financial Trusts 1,263 408 14 - 1,685

Other Financing 426 - - - 426

Receivables from Financial Leases 143 154 4 5 306

Others 149 - - - 149

Total Assets 135,574 13,271 171 14 149,030

Liabilities

Deposits in Savings Accounts 27,318 - - - 27,318

Demand Deposits 20,303 - - - 20,303

Time Deposits 51,615 10 - - 51,625

Negotiable Obligations 2,268 10,236 - - 12,504

International Banks and Credit Entities 1,186 220 - - 1,406

Local Financial Institutions 883 506 4 - 1,393

Other Financing (1) 22,635 - - - 22,635

Total Liabilities 126,208 10,972 4 - 137,184

Asset / Liability Gap 9,366 2,299 167 14 11,846

Cumulative Gap 9,366 11,665 11,832 11,846 11,846

Ratio of Cumulative Gap to Cumulative Liabilities 7.4% 8.5% 8.6% 8.6%

Ratio of Cumulative Gap to Total Liabilities 6.8% 8.5% 8.6% 8.6%

Principal plus CER adjustment. It does not include interest. (1) It includes, mainly, debt with stores in connection with credit card operations, liabilities in connection with repurchase

agreement transactions and debt with domestic credit agencies and collections for third parties.

The table above is prepared taking into account contractual maturity. Therefore, all financial assets

and liabilities with no maturity date are included in the “Less than One Year” category.

Banco Galicia must comply with a maximum limit for liquidity mismatches. This limit has been

established at -25% (minus 25%) for the ratio of cumulative gap to total liabilities within the first

year.

Currency Risk (Currency Mismatch)

Financial brokerage naturally involves the raising of funds and the subsequent use thereof. Both

funding (deposits and other alternative sources of financing) and the use of the funds in loans

and/or investments can be carried out in assets and liabilities denominated in different currencies.

This possible currency mismatch between liabilities and the use thereof on assets generates a

source of risk that arises from the variations in the different foreign currency exchange rates. This

risk is inherent to the structure of assets and liabilities per currency.

Currency risk is defined as the risk of incurring in equity losses as a consequence of variations in

the foreign currency exchange rates in which assets and liabilities (both on and off the Balance

Sheet) are denominated.

The policy framework currently in force establishes limits in terms of maximum net asset positions

(assets denominated in a currency which are higher than the liabilities denominated in such


currency) and net liability positions (assets denominated in a currency which are lower than the

liabilities denominated in such currency) for mismatches in foreign currency, as a proportion of the

Bank’s computable regulatory capital (RPC, as per its initials in Spanish), on a consolidated basis. Banco Galicia manages mismatches not only regarding assets and liabilities, but also covering

mismatches through the foreign currency futures market. Transactions in foreign currency futures

(U.S. Dollar futures) are carried out through MAE, ROFEX and with customers. These transactions

are subject to limits that take into consideration characteristics particular of each trading

environment.

The table below shows the composition of Banco Galicia’s (consolidated) shareholders’ equity as

of December 31, 2015, by currency and type of principal adjustment:

Composition of Shareho ders’ Equity as of aecember 31, 2015

In millions of Pesos Assets Liabilities Gap

Financial Assets and Liabilities 149,495 139,761 9,734

Pesos - Adjusted by CER 686 12 674

Pesos – Non-Adjusted 121,572 111,698 9,874

Foreign Currency (1) 27,237 28,051 (814)

Other Assets and Liabilities 11,055 6,977 4,078

Total Gaps 160,550 146,738 13,812

Adjusted for Forward Transactions Recorded in Memorandum

Accounts:

Financial Assets and Liabilities 149,495 139,761 9,734

Pesos - Adjusted by CER 686 12 674

Pesos- Non-Adjusted (2) 97,487 90,450 7,037

Foreign Currency (1) (2) 51,322 49,299 2,023

Other Assets and Liabilities 11,055 6,977 4,078

Total Adjusted Gaps 160,550 146,738 13,812

(1) Stated in Pesos, at the exchange rate of Ps. 13.005 per U.S. Dollar.

(2) Adjusted for forward sales and purchases of foreign exchange, without delivery of underlying assets and recorded in

Memorandum Accounts.

As of December 31, 2015, considering the adjustments from forward transactions recorded under

memorandum accounts, Banco Galicia had net asset positions in foreign currency and Pesos

adjusted and non-adjusted by CER.

The paragraphs below describe Banco Galicia’s composition of the different currency mismatches

as of December 31, 2015 on a consolidated basis.

Peso-denominated Assets and Liabilities Adjusted by CER

At fiscal year-end, the Bank had a net asset position of Ps. 674 million, mainly made up of Ps.

686 million corresponding to the participation certificate in Galtrust I Financial Trust.

The limit established for the CER-adjusted mismatch is at 100% and at 25% of the Bank’s RPC for

the net asset position and the net liability position, respectively. At fiscal year-end, the asset

position in Pesos adjusted by CER accounted for 4.8% of the Bank’s RPC.

Foreign Currency Assets and Liabilities

The Bank’s assets denominated in foreign currency mainly comprised the following: (i) Cash and

balances held at the Argentine Central Bank and correspondent banks for Ps. 17,654 million; (ii)

loans to the non-financial private sector and residents abroad for Ps. 3,208 million (principal and

interest, net of allowances), and (iii) government securities for Ps. 5,198 million.


The Bank’s liabilities denominated in foreign currency consisted mainly of: (i) Deposits for Ps.

14,377 million (principal, interest and quotation differences); (ii) Ps. 9,106 million of subordinated

and unsubordinated negotiable obligations issued by Banco Galicia and the regional credit-card

companies; (iii) debt with international banks and credit agencies for Ps. 1,408 million; and (iv) Ps.

2,081 million in connection with collections for third parties.

A net liability position of Ps. 814 million stemmed from the consolidated balance sheet.

Furthermore, forward transactions in foreign currency without delivery of the underlying asset for

a notional value of Ps. 2,837 million were recorded in memorandum accounts. Therefore, as of

that date, the Bank’s net position in foreign currency adjusted to reflect these transactions was an

asset position of Ps. 2,023 million, equivalent to US$ 156 million.

Banco Galicia has set limits as regards foreign-currency mismatches at -10% (minus 10%) of the

Bank’s consolidated RPC for its net liability position. At the end of the fiscal year, Banco Galicia's

position in foreign currency represented 14.4% (plus 14.4%) of the consolidated RPC.

Non-adjusted Peso-denominated Assets and Liabilities

The Bank’s non-adjusted Peso-denominated assets mainly comprised the following: (i) Loans to the

non-financial private sector for Ps. 94,380 million (principal plus interest, net of allowances); (ii)

cash and balances held at the Argentine Central Bank and correspondent banks for Ps. 14,713

million (including the balance of escrow accounts); (iii) Ps. 6,606 million corresponding to the

holdings of securities issued by the Argentine Central Bank; (iv) Ps. 3,240 million corresponding to

the holding of debt securities, primarily Bonar, provincial securities and others; (v) Ps. 1,910

million corresponding to negotiable obligations and (vi) Ps. 602 million corresponding to debt

securities and participation certificates in various financial trusts.

Banco Galicia’s non-adjusted Peso-denominated liabilities mainly comprised: (i) Deposits for Ps.

85,791 million (principal plus interest); (ii) liabilities with stores in connection with Banco Galicia’s

credit card activities and the regional credit-card companies for Ps. 15,316 million; (iii) Ps. 3,914

million corresponding to negotiable obligations issued by regional credit-card companies and CFA;

and iv) Ps. 1,391 million in liabilities with local financial institutions (almost all corresponding to

the regional credit-card companies).

The net asset position in non-adjusted Peso-denominated assets and liabilities was Ps. 6,973

million at fiscal year-end.

Other Assets and Liabilities

In the category “Other Assets and Liabilities”, the assets were mainly the following: (i) Bank,

premises and equipment, miscellaneous and intangible assets for Ps. 4,838 million; (ii)

miscellaneous receivables for Ps. 2,091 million;

Liabilities mainly included the following: (i) Ps. 3,979 million recorded under “Miscellaneous

Liabilities”, and (ii) provisions for other contingencies for Ps. 456 million.

Interest Rate Risk (Balance Sheet Structural Risk)

Another distinctive and natural characteristic of financial brokerage is the existence of interest-

earning assets and interest-bearing liabilities with different maturities (or different rate repricing

periods) and interest rates that can be fixed or variable. This situation leads to a gap or mismatch

that arises from the balance sheet and measures the imbalance between fixed- and variable-rate

assets and liabilities, and results in the so-called interest-rate risk or else Balance Sheet structural

risk. A commercial bank can face the interest rate risk on both sides of its balance sheet: With


regard to the income generated by assets (loans and securities) and the expenses related to the

interest-bearing liabilities (deposits and others sources of funds).

The policy currently in force defines this gap as the risk that the financial margin and the economic

value of equity may vary as a consequence of fluctuations in market interest rates. The magnitude

of such variation is associated with the sensitivity to interest rates of the structure of the Bank's

assets and liabilities.

Aimed at managing and limiting the sensitivity of Banco Galicia's economic value and results with

respect to variations in the interest rate inherent to the structure of certain assets and liabilities,

the following caps have been determined:

Limit on the net financial income for the first year.

Limit on the net present value of assets and liabilities.

Limit on the Net Financial Income for the First Year

The effect of interest rate fluctuations on the net financial income for the first year is calculated

using the methodology known as scenario simulation. On a monthly basis, net financial income for

the first year is simulated in a base scenario and in a “+100 basis points” scenario. In order to

prepare each scenario, different criteria are assumed regarding the sensitivity to interest rates of

assets and liabilities, depending on the historical performance observed of the different balance

sheet items. Net financial income for the first year in the “+100 basis points” scenario is

compared to the net financial income for the first year in the base scenario. The resulting

difference is related to the annualized accounting net financial income for the last calendar trailing

quarter available, for Banco Galicia on a consolidated basis, before quotation differences and CER

adjustment.

The limit on a potential loss in the “+100 basis points” scenario relatively to the “base” scenario

was established at 20% of the net financial income for the first year, as defined in the above

paragraph. At fiscal year-end, the negative difference between the net financial income for the

first year corresponding to the “+100 b.p.” scenario and that corresponding to the “base”

scenario accounted for -0.1% (minus 0.1%) of the net financial income for the first year.

Limit on the Net Present Value of Assets and Liabilities

The net present value of assets and liabilities is also calculated on a monthly basis and taking into

account the assets and liabilities of Banco Galicia's consolidated balance sheet. A methodological

adjustment was made and implemented in the interest rate risk calculation, from the “Net Present

Value” standpoint.

The net present value of the consolidated assets and liabilities, as mentioned, is calculated for a

“base” scenario in which the listed securities portfolio is discounted using interest rates obtained

according to interest rate curves determined based on the market yields of different reference

bonds denominated in Pesos, in U.S. Dollars and adjusted by the CER. Interest rate curves for

unlisted assets and liabilities are also created using market interest rates. The net present value of

assets and liabilities is also obtained for a second scenario called “critical”, where through a

significant number of statistical simulations of the interest rate track record, a “critical” scenario is

obtained as a result of the interest rate risk exposure presented by the balance sheet structure.

The economic capital is obtained from the resulting difference between the “critical” scenario and

the present value of assets and liabilities of the “base” scenario, and considering a 99.5%

confidence interval.

The limit on interest rate risk exposure, stated as a difference between the present value of assets

and liabilities in the “base” scenario and the “critical” scenario cannot exceed 15% of the


consolidated RPC. As of December 31, 2015, the “Value at Risk” (also known as "VaR") stood at

-13.6% (minus 13.6%) of the RPC.

Market Risk

The exposure to portfolios of listed financial instruments, whose value varies according to the

movement in their market prices, is subject to a specific policy framework that regulates the risk

of incurring a loss as a consequence of the variation of the market price of financial assets whose

value is subject to negotiation.

Brokerage transactions and/or investments in government securities, currencies, negotiable

obligations, derivative products and debt instruments issued by the Argentine Central Bank are

governed by the policy that limits the maximum tolerable losses in a given fiscal year.

In order to measure and monitor this source of risk, the model known as VaR is used, among

others. This model determines intra-daily, for the Bank individually, the possible loss that could be

generated by the positions in securities, derivative instruments and currencies under certain

parameters.

The parameters taken into consideration are as follows:

(i) A 99% “degree of confidence.”

(ii) VaR estimates are made for holding periods of “n” days, defined as the number of days

necessary to settle the position in each security.

(iii) In the case of securities, if they are new issuances, the available trading days are taken

into consideration for the calculation of volatilities; if there are not enough trading days or

if there are no quotations, the volatility of bonds from domestic issuers with similar risk

and characteristics is used.

Likewise, the measurement method known as DVO1 (Dollar Value of One Basis Point) is also

applied to measure and monitor the trading of debt instruments issued by the Argentine Central

Bank, debt securities issued by the provinces and the brokerage of negotiable obligations.

Banco Galicia's policy requires that the Risk Management and Treasury Divisions agree on the

parameters under which the models work, and establishes the maximum losses authorized both for

securities, foreign-currency, Argentine Central Bank’s debt instruments and derivative products in

a fiscal year. Maximum losses were established in:

Risk Policy on Limits

Currency Ps. 57 million Fixed-Income Ps. 271 million Interest Rate Derivatives Ps. 25 million

Furthermore, the policy includes the regular carrying out of stress tests, which goal is to assess

the risk positions and their results, under adverse market conditions. Finally, “contingency plans”

were designed for each transaction, which include the actions to be implemented in a critical

scenario.

Cross-border Risk

It is the risk of incurring in equity losses as a consequence of the impairment or uncollectibility of

exposures (loans, positions in securities, equity investments, and liquidity) located in international

jurisdictions. It comprises risks generated by entering into transactions with public or private

counterparties residing abroad.


In order to regulate risk exposures in international jurisdictions, limits were established taking into

consideration the jurisdiction’s credit rating, the type of transaction and a maximum exposure per

counterparty.

The Bank defined its policy by setting maximum exposure limits measured as a percentage of its

RPC and taking into account if the counterparty is considered investment grade:

Risk Required Credit Rating Investment Grade Not Investment

Grade

-Jurisdictional Risk International Rating

Agency

No limit Maximum limit: 5%

-Counterparty Risk International Banking

Relations

Credit Division

Maximum limit: 15%

The limit is

distributed between

financial and foreign

trade transactions,

thus absorbing local

counterparty margin

Maximum limit: 1%

Only foreign trade

transactions

Overseas Foreign Currency Transfer Risk

With the purpose of mitigating the risk resulting from an eventual change in domestic laws that

may affect overseas foreign currency transfers, in order to meet incurred liabilities, a policy was

devised to set a limit for liabilities transferred abroad, as a proportion to total consolidated

liabilities. Such ratio was fixed in 15%.

As of December 31, 2015, exposure stood at 8.7% over total liabilities.

Risk Exposures in the Non-financial Public Sector

Risk exposures in the “Non-financial Public Sector” in federal, provincial and municipal jurisdictions

are regulated by a management policy set in the last quarter of fiscal year 2012.

The policy sets limits on risk exposures, establishing a “possible loss” (as a percentage of the

Bank’s RPC) associated with a given position, contemplating in its application the debt instruments

issued by the different jurisdictions and other possible vehicles of financing to the Non-financial

Public Sector. The policy is also supplemented by a limit that establishes that the total position in

the Non-financial Public Sector should not exceed a given percentage of the Bank’s RPC.

The limits set are as follows:

- The possible loss cannot exceed 4% of the Bank’s RPC.

- The total position cannot exceed 70% of the Bank’s RPC.

Operational Risk

Banco Galicia adopts the definition of operational risk determined by the Argentine Central Bank

and the best international practices. Operational risk is the risk of losses due to the lack of

conformity or due to failure of internal processes, the acts of people or systems, or else because

of external events. This definition includes legal risk, but does not include strategic and reputation

risks.

Banco Galicia defined the framework for the operational risk management, which comprises the

financial institution’s policies, practices, procedures and structures for its proper management.


The Risk Management Division, independent from the business or support units involved, includes

a specific unit that is responsible for the management of such risks. The duties of this unit are,

among others, to develop and monitor the operational risk management model, inherent in the

Bank’s products, activities, processes, systems and technology, aligned with the regulations and

best practices in force, organize the main necessary processes, provide advice, training and

support to divisions, ensure that the Bank’s contingency, recovery and activity continuity plans are

developed according to the size and complexity of its operations, as well as the respective tests

thereon.

The operational risk management is understood as the identification, assessment, monitoring,

control and mitigation of this risk. It is an ongoing process carried out throughout the Bank, which

fosters a risk management culture at all organization levels through an effective policy and a

program led by Senior Management.

Identification

The starting point of the operational risk management is the identification of risks and their

association with the controls established to mitigate them, considering internal and external

factors that may affect the process development. The results of this exercise are entered into a

log of risks, which acts as a central repository of the nature and status of each risk and controls

thereof.

Assessment

Once risks have been identified, the size in terms of impact, frequency and likelihood is

determined.

Monitoring

The monitoring process allows detecting and correcting the possible deficiencies in operational risk

management policies, processes and procedures or their update.

Risk Control and Mitigation

The control process ensures compliance with internal policies and analyzes risks and responses to

avoid, accept, mitigate or share them, by aligning them with the risk tolerance defined.

The methodological approach adopted by the Bank includes several management tools.

Self-Risk Assessment

The self-risk assessment is a process to identify and assess existing risks, considering the controls

established to manage and mitigate them. The self-assessment is a critical component of the

operational risk management framework since the vulnerability of operations and activities to risk

can be verified based on this process. Assessment can be quantitative or qualitative.

Operational Risk Map

The operational risk map allows viewing all the risks assessed within a matrix of colors that, at

first sight, points out those risks in a classification of high, very high, medium, low and very low,

for their later analysis and for the preparation of reports or action plans.

Risk Indicators

Risk indicators, which are risk assessment mechanisms based on thresholds set, are defined by

business and support area managers, and offer a fair basis to estimate the likelihood and severity

of one or more operational risk events.

Collection of Risk Events


It is the tool whereby material data about risk events detected are identified and logged

systematically. The collection of these events contributes to reducing incidents and the amounts

of losses, as well as improving the products service quality.

The Bank has defined training strategies, together with the Organizational Development and

Human Resources Division, for the purpose of training and making all its employees aware of the

importance of the operational risk and its proper management. For training programs, the

Argentine Central Bank regulations and the definitions included in the Operational Risk Policy are

taken into account.

The Bank has also defined policies to mitigate risks derived from service outsourcing and a code of

conduct governing the relationship with suppliers.

The Bank also ensures that its operational risks are appropriately assessed before launching or

introducing new products, activities, processes or systems.

Accordingly, the Bank has the structure and necessary resources to be able to set the operational

risk profile and take, as the case may be, the appropriate corrective actions, complying with the

regulations established by the Argentine Central Bank about the guidelines for the operational risk

management at financial institutions.

The minimum capital requirement with regard to the operational risk is determined according to the

Argentine Central Bank regulations.

An appropriate management of operational risks also helps improve customer service quality.

REGULATORY CAPITAL

Grupo Financiero Galicia, as well as the companies it controls, is regulated by the General

Corporations Law. In Section 186, the law establishes the minimum capital amount of a

corporation. Through Decree 1331/12, which came into force on October 8, 2012, such amount

was determined to be Ps. 100,000.

Banco Galicia

With regard to regulatory capital, Banco Galicia must comply with the regulations set forth by the

Argentine Central Bank. These regulations are based on the Basel Committee methodology, and

establish the minimum capital a financial institution is required to maintain in order to cover the

different risks inherent to its business activity and incorporated into its assets. Such risks mainly

include: Credit risk, generated both by exposure to the private sector and to the public sector;

operational risk, generated by the losses resulting from the non-adjustment or failures of internal

processes; market risk, generated by positions in securities, foreign currency and CER.

Computable capital breaks down as follows:

Computable regulatory capital is divided into Basic Shareholders’ Equity (Tier 1 Capital) and

Supplementary Shareholders’ Equity (Tier 2 Capital). Deductible Items start to be mainly

part of the Basic Shareholders’ Equity.

Equity investments in financial institutions, credit card issuers, insurance companies and

others with activity supplementary to the financial institution should be deducted from the

calculation of computable capital.

Results for the period are part of the Basic Shareholders’ Equity (Income: 100% of audited

results, 50% of unaudited results; Losses: 100%). Previously they were part of the

Supplementary Capital.


Supplementary Shareholders' Equity includes subordinated negotiable obligations and

100% of the allowances for loan losses on the portfolio in normal situation.

Regardless of the reduction in their calculation by 20% per annum starting five years

before their maturity, as from 2013, subordinated negotiable obligations shall be computed

at 90% of their value, decreasing 10 percentage points every 12 months.

The following risk weights are applied to the main exposures regarding minimum capital

requirements:

Loans in Pesos to the Non-financial Public Sector: 0%.

Bank Premises and Equipment and Miscellaneous Assets: 8%.

Family Mortgage Loans: 35% over the 8%, if the amount does not exceed 75% of the

asset value.

Retail Portfolio(1): 75% over 8%.

Additionally, as from December 2015, the Argentine Central Bank, through Communiqué “A”

5831, established that the minimum capital requirement to cover credit risk be computed based on

end-of-month balances. Until November 2015, the information was calculated based on the

monthly average balances of the second month preceding that to which the minimum capital

requirement was related. Computable capital is computed for the same month of the minimum

capital requirement, whereas the prior-month balance was previously disclosed.

Minimum capital requirements must be met by the Bank, not only on an individual basis, but also

on a consolidated basis with its significant subsidiaries.

Regulatory Capital (*)


Shareho ders’ Equity – Computable Regulatory Capital 13,812 9,899 6,741

Minimum Capital Requirements (a) 11,063 7,077 5,691

Credit Risk 8,369 5,098 4,328

Market Risk 296 200 58

Operational Risk 2,398 1,779 1,305

Computable Capital (b) 14,071 10,133 7,513

Tier One Common Capital 11,732 8,041 5,478

Tier Two Common Capital 2,339 2,020 1,805

Additional Capital per Market Variation - 72 230

Difference (b – a) 3,008 3,056 1,822

Total Risk Assets 105,193 63,690 52,605

Ratios (%)

Shareholders’ Equity as a % of Total Consolidated Assets 8.60 9.34 8.20

Excess Over Required Capital as % of Required Capital 27.19 43.18 32.02

Total Capital Ratio 13.38 15.91 14.28

(*) In accordance with Argentine Central Bank regulations applicable at each date.

As of December 31, 2015, the Bank’s computable capital exceeded in Ps. 3,008 million (27.2%)

the minimum capital requirement, which was Ps. 11,063 million. This excess amount was Ps.

3,056 million (43.2%) as of December 31, 2014.

The minimum capital requirement increased by Ps. 3,986 million, when compared to December

31, 2014, mainly due to the increase related to: i) financing to the private sector: Ps. 3,271

(1) Through Communiqué “A” 5831 dated November 18, 2015, effective as from fecember, retail portfolio was defined as

individuals with loans equal to 75 times the minimum living wage and MiPyMEs (MicroPyMEs) with loans up to Ps. 10

million, as long as the agreed amount does not exceed 30% of income.


million due to the growth of the balances thereof (the variation was also influenced by the above-

mentioned regulatory change, Communiqué “A” 5831) and ii) operational risk: Ps. 619 million.

Computable capital increased by Ps. 3,938 million when compared to December 31, 2014, due to

an increase of Ps. 3,691 million in Tier 1 Common Capital, primarily as a result of the higher

results recorded, partially offset by higher deductions as a consequence of organization and

development expenses. The Tier 2 Common Capital increased by Ps. 319 million primarily as a

result of the increase in the computable balance for the allowance for loan losses on the portfolio

in normal situation.

The capital ratio recorded in 2015 stood at 13.38%, 2.53 percentage points lower as compared to

2014 due to the above-mentioned regulatory change. If the effective methodology is kept until

November 2015, the capital ratio would be similar to that recorded in 2014.

Insurance Companies

The insurance companies controlled by Sudamericana Holding S.A. must meet the minimum

capital requirements set by the Argentine Superintendency of Insurance.

The abovementioned regulatory agency requires insurance companies to maintain a minimum

capital level based on: a) line of insurance; b) premiums and surcharges and c) claims. The

minimum required capital must then be compared to computable capital, defined as shareholder’s

equity less noncomputable assets. Noncomputable assets consist mainly of deferred charges,

pending capital contributions, proposed distribution of profits and excess investments in authorized

instruments.

As of December 31, 2015, the computable capital of the companies controlled by Sudamericana

Holding S.A. exceeded the minimum requirement of Ps. 387 million by Ps. 120 million.

Sudamericana Holding S.A. also holds Galicia Broker Asesores de Seguros S.A., company

dedicated to the brokerage in different lines of insurance that is regulated by the guidelines of the

General Corporations Law.

CAPITAL AND RESERVES AND PROPOSED DISTRIBUTION OF PROFITS

As of the close of fiscal year ended December 31, 2015, balances corresponding to capital, capital

adjustment, premium for trading of shares in own portfolio and additional paid-in capital totaled Ps.

1,797,990,556.43.

Profits recorded in fiscal year 2015 amounted to Ps. 4,338,396,375.83, which the Board of

Directors proposes to distribute as follows:

In Pesos

To Cash Dividends (1) 150,000,000.00

To Discretionary Reserve 4,188,396,375.83

(1) 11.5361135% with regard to 1,300,264,597 Class “A” and “B” ordinary shares with a face value of

Ps. 1 each.

(2) Pursuant to what is set forth in the last paragraph of the section incorporated by Act No. 25585 after

Section 25 of Act No. 23966, when decided, and in the cases that may correspond, the Company will be

restored the amounts corresponding to the tax on personal assets it paid for fiscal year 2015 in its

capacity as substitute taxpayer of the shareholders subject to the above-mentioned tax. Additionally,

pursuant to Section 4 of Act No. 26893, the Company shall withhold 10% for income tax from those

shareholders subject to the tax.


Should the foregoing proposal be approved, the composition of Grupo Financiero Galicia S.A.’s

shareholders’ equity, as of December 31, 2015, pursuant to the applicable regulations, would be

as follows:

In Pesos

Capital Stock 1,300,264,597.00

Capital Adjustment 278,130,755.47

Premium for Trading of Shares in Own Portfolio 605,682.08

Additional Paid-in Capital 218,989,521.88

Profit Reserves

Legal Reserve 315,679,070.49

Facultative Reserve 12,221,150,636.26

Tota Shareho ders’ Equity 14,334,820,263.18

Eduardo J. Escasany


Autonomous City of Buenos Aires

March 9, 2016

This Annual Report contains statements regarding events which are currently anticipated to occur in the future, or forward-

looking statements. These forward-looking statements or projections reflect Grupo Financiero Galicia S.A.’s opinions and

expectations with respect to future events and their occurrence in general, as well as with respect to particular events. As a

result of factors not considered, which are unforeseen at the time of making such forward-looking statements or which are out

of Banco de Galicia y Buenos Aires S.A.’s control, actual results or their consequences could differ significantly from those that

are contemplated or estimated to occur in the future. Shareholders and other readers of this Annual Report are cautioned not to

place undue reliance on such forward-looking statements or projections, which speak only as of their dates. Grupo Financiero

Galicia S.A. assumes no obligation to publicly update or revise any forward-looking statements or projections, whether as a

result of new information, future events or otherwise. Finally, shareholders and any other reader of this Annual Report must note

that this translation has been made from the original version written and expressed in Spanish, therefore, any matters of

interpretations should be referred to the original version in Spanish.


REPORT ON THE CODE ON CORPORATE GOVERNANCE

The Board of Directors of Grupo Financiero Galicia S.A. (hereinafter “Grupo Financiero Galicia”)

complies, in every relevant respect, with the recommendations included in the Code on Corporate

Governance as Schedule IV to Title IV of the amended regulations issued by the National

Securities Commission (Text amended in 2013). The aforementioned is in accordance with what

stems from the following “Response Structure” table.

As a general introduction, it should be noted that, since its beginning, Grupo Financiero Galicia has

constantly shown respect for the rights of its shareholders, reliability and accuracy in the

information provided, transparency as to its policies and decisions, and caution with regard to the

disclosure of strategic business issues. Moreover, it should be said that all resolutions from the

corporate bodies have been adopted pursuant to Grupo Financiero Galicia S.A.’s corporate

interest.

RESPONSE STRUCTURE – SCHEDULE IV

REPORT ON THE DEGREE OF COMPLIANCE WITH THE CODE ON CORPORATE GOVERNANCE

Compliance

Noncompl

iance

(1)

Report (2) or Explain (3) Total

(1)

Partial

(1)

PRINCIPLE I. MAKE THE RELATIONSHIP TRANSPARENT AMONG THE ISSUER, THE GROUP

HEADED THEREBY AND/OR OF WHICH IT IS A MEMBER AND ITS RELATED PARTIES

Recommendation I.1:

Ensure the disclosure by the

Management Body of the

policies applicable to the

Issuer’s relationship with

the group headed thereby

and/or of which it is a

member and its related

parties.

Please answer if:

The Issuer has an internal

rule or policy for the

authorization of

transactions among related

parties pursuant to Section

73 of Act No. 17811,

transactions carried out

with shareholders and

members of the

management bodies, first-

line managers and syndics

and/or members of the

Oversight Committee,

within the environment of

the economic group headed

X Pursuant to the provisions of Section 72 of the

Capital Markets Law, every act or contract the

company carries out or else enters into with a

related party that involves a significant amount

shall be subject to previous consideration by

the Audit Committee, which shall issue a

grounded opinion and shall determine whether

its terms are reasonably appropriate with regard

to ordinary and customary market conditions.

The term to issue such opinion is 5 (five)

calendar days. If the Board of Directors deems

it necessary, it can request the opinion be

issued by independent audit firms. In case the

Audit Committee or else the independent audit

firm believes the transaction conditions are not

considered reasonably appropriate with regard

to the market, under consideration by the Board

of Directors, the transaction shall be subject to

the prior approval by the Shareholders'

Meeting. If the transaction conditions are

considered reasonably appropriate with regard

to ordinary and customary market conditions,

the Board of Directors submits the issue for its

approval and discloses the decision in minutes,

indicating each Director’s vote. The report of


thereby and/or of which it

is a member. Specify the

main guidelines of the

internal rule or policy.

the Audit Committee and, if applicable, the

reports of independent audit firms, are made

available for the consideration of shareholders

at the Company’s registered office, on the next

business day after the corresponding decision

of the Board of Directors has been adopted.

This is informed to shareholders through the

Financial Information Highway (AIF as per its

initials in Spanish) of the National Securities

Commission and the Market's Gazette.

Recommendation I.2:

Ensure the existence of

mechanisms that would

prevent conflicts of

interests.

Please answer if:

Notwithstanding the

regulations in force, the

Issuer has clear policies and

specific procedures for the

identification, management

and solving of conflicts of

interest that could arise

among the members of the

Management Body, first-line

managers and syndics

and/or members of the

Oversight Committee

regarding their relationship

with the Issuer or

individuals related thereto.

Describe the most

significant aspects thereof.

X Since it is a holding company, whose activity

involves managing its equity investments,

assets and resources, it has a limited personnel

structure, what eases the identification, control

and solving of possible conflicts of interest.

In this regard, Grupo Financiero Galicia’s Code

of Ethics sets forth that all the Company’s

employees are responsible for avoiding acting

on behalf of the Company in situations where

the employee and/or a close relative has any

kind of personal interest, and/or using the

Company name improperly, and/or accepting

any kind of favors from any individual or entity

with which Grupo Financiero Galicia at present

has or will have in the future a business

relationship, and/or taking personal advantage

from any business opportunity in which Grupo

Financiero Galicia was involved, and/or

providing any of Grupo Financiero Galicia’s

competitors with any kind of assistance for the

benefit of its commercial activity. In the event

any conflict of interest arises due to

employment reasons or of any other kind, the

Company’s employees shall immediately report

the situation to the person in charge of the

Audit Committee. Company’s employees shall

not perform business or professional activities

at the same time as and similar to those ones

carried out for Grupo Financiero Galicia, which

in any way may compete with any of the

Company’s businesses. Those Company’s

employees who have any influence on Grupo

Financiero Galicia’s business decisions, or any

such employee’s close relative shall not have a

significant financial interest; for example, as a

shareholder or administrator, in any of Grupo

Financiero Galicia’s suppliers, without the prior

written consent by the Company’s Board of

Directors. In the event any employee or such

employee’s close relative has any significant

financial interest in any of Grupo Financiero

Galicia’s competitors, such employee shall


report the situation to the person in charge of

the Audit Committee. Company’s executive

officers, managers, professionals and

technicians who have undertaken any activity

other than the one performed at Grupo

Financiero Galicia shall fully inform about said

activity to the person in charge of the Audit

Committee. Company’s employees shall not

carry out civic or political activities during

business hours that may cause any conflict of

interests, since this may be understood as

Grupo Financiero Galicia’s participation in such

activities. Pursuant to what is set forth in its

rules and regulations, the Audit Committee shall

intervene in cases of transactions where there

are or may be conflicts of interests regarding

members of the Company's governing bodies or

controlling shareholders and, if applicable

pursuant to the regulations in force, shall

submit the market the pertinent information in

due time.

Recommendation I.3:

Prevent the misuse of inside

information.

Please answer if:

Notwithstanding the

regulations in force, the

Issuer has policies and

mechanisms that prevent

the misuse of inside

information by the members

of the Management Body,

first-line managers and

syndics and/or members of

the Oversight Committee,

controlling shareholders or

shareholders that have a

material influence on the

Issuer, professionals that

take part and the rest of the

individuals mentioned in

Sections 7 and 33 of

Decree No. 677/01.

Describe the most


X Grupo Financiero Galicia has staff in charge of

Investor Relations, and the individuals who

perform this function are in no case authorized

to provide information that may place the

person who requests such information in a

privileged or advantageous position in

comparison to the other shareholders or

investors.

In this regard, the Code of Ethics provides for

that no accounting information that has not

been already disclosed to the public as regards

Grupo Financiero Galicia or its affiliates shall be

released without the prior written approval by

Grupo Financiero Galicia’s Chief Financial and

Accounting Officer. Also, employees are not

allowed to inform or use confidential

information obtained while he/she works for

Grupo Financiero Galicia for his/her own benefit

or for third parties’ benefit, such as trading

Grupo Financiero Galicia’s securities or

securities of its potential commercial

associates. Customers of Grupo Financiero

Galicia’s related companies rely on the fact that

their personal information was exclusively

obtained with commercial purposes.

Consequently, employees shall adopt the

necessary measures to ensure confidentiality,

integrity and availability of such data and

information. This comprises identification of

such data that have to be protected, adequate

levels of protection for such data, and access


to such protected data only by those people

who must use them to perform their functions.

Any employee who has any information due to

his/her position or activity with respect to a

Company’s performance or businesses subject

to a public offering of securities, which has not

been disclosed to the market and that may

affect in any way such securities’ price, or that

may affect trading transactions and negotiation

of such securities, shall be strictly reserved

about that information. Grupo Financiero

Galicia’s employees or those people hired by

Grupo Financiero Galicia, such as the cases of

external audit or consulting services, shall

refrain from using confidential information for

their own benefit or for third parties’ benefit.

Any employee shall be responsible for managing

carefully access passwords, and under no

circumstance he/she is allowed to inform them.

Furthermore, employees shall refrain from

informing confidential information to another

person who then acquires or sells Grupo

Financiero Galicia’s securities, including put or

call options on such securities and/or trading

securities from any other Company whose

value could be affected by Grupo Financiero

Galicia’s measures that have not been released

to the public yet, as well as put or call options

on such securities.

PRINCIPLE II. LAY THE BASIS FOR A SOUND MANAGEMENT AND SUPERVISION OF THE

ISSUER

Recommendation II.1:

Ensure that the

Management Body assumes

the management and

supervision of the Issuer

and its strategic orientation.

Please answer if:

II.1.1 The Management

Body approves:

X With regard to the requirements, we inform the

following:

II.1.1.1 The strategic or

business plan, as well as

the annual management

goals and budgets;

X The Board of Directors approves the annual

budget and monitors compliance therewith.

Furthermore, in its capacity as a holding

company, Grupo Financiero Galicia receives the

business plans of the controlled companies and

prepares a consolidated business plan taking

into consideration the goals set, the business

condition and the budgets submitted.

II.1.1.2 The policy on

investments (in financial

assets and capital goods),

X The policy on investments (in financial assets

and capital goods) and financing is approved by

the Board of Directors.


and financing;

II.1.1.3 The policy on

corporate governance

(compliance with the Code

on Corporate Governance);

X Grupo Financiero Galicia monitors the

application of the corporate governance policies

provided for by the regulations in force through

the Audit Committee and the Disclosure

Committee. There also exist matrices specially

designed for the verification of certain aspects

such as internal controls, independence of

directors and regulatory updating.

II.1.1.4 Policy to select,

assess and compensate

first-line managers;

X The policy to select, assess and compensate

first-line managers is defined and approved by

the Board of Directors.

II.1.1.5 Policy to assign

responsibilities to first-line

managers;

X The policy to assign responsibilities to first-line

managers is approved and monitored by the

Board of Directors, which sets the guidelines

thereof.

II.1.1.6 Monitoring of

succession plans of first-

line managers;

X The monitoring of succession plans of first-line

managers is the responsibility of the Board of

Directors. Taking into consideration the limited

personnel structure of the Issuer, such plans are

drawn up on an individual basis.

II.1.1.7 Policy on corporate

social responsibility;

X The policies on corporate social responsibility

are defined and carried out by each of the

operating companies.

II.1.1.8 Policy on

comprehensive risk

management and internal

control, and fraud

prevention;

X The policies on risk management control, as

well as any other which purpose is to monitor

internal information and control systems, are

defined within the framework of each of the

affiliated operating companies. Nonetheless,

and in addition to that, the Audit Committee

and the Disclosure Committee monitor the

actions taken by the main controlled

companies.

II.1.1.9 Policy on ongoing

training for the members of

the Management Body and

first-class managers;

If the Company has these

policies, describe the most


X Training of directors and managers, obviously

to an extent that cannot be compared to what

is required in the case of operating companies,

is carried out pursuant to what the Board of

Directors deems necessary.

II.1.2 If deemed important,

include other policies

applied by the Management

Body that have not been

mentioned before, and

specify the main aspects

thereof.

----- ----- ------- ---------------------------------------

II.1.3 The Issuer has a

policy intended for ensuring

the availability of material

information for the

X The material information for the Board of

Directors’ decision-making is put at the disposal

of all of its members for their consideration, in

advance for the detailed analysis thereof, with


Management Body’s

decision-making, and a

direct consultation way for

managerial staff, in a

symmetric manner for all of

its members (executive,

external and independent)

and in advance, that allows

the appropriate analysis of

its contents. Specify.

changes in the term pursuant to the scope and

complexity of such information. The Managing

Director and the Chief Financial and Accounting

Officer are at the disposal of the directors to

answer questions related to the duties assigned

to them, or else to the reports prepared by

them. They even take part in the meetings

convened by directors in order to answer

questions that could be raised when dealing

with issues they are responsible for.

II.1.4 Matters submitted for

the Management Body's

consideration are

accompanied by an analysis

of the risks associated with

the decisions that could be

adopted, taking into

consideration the business

risk level considered

acceptable by the Issuer.

Specify.

X The Board of Directors fully complies with the

requirement of having updated policies on risk

control and management, in line with the best

practices. The tasks related to risk information

and internal control of each of the controlled

companies are defined and carried out,

rigorously, in each of them. This is particularly

strict in the main controlled company, Banco

Galicia, where the requirements to be complied

with are stringent as it is a financial institution

regulated by the Argentine Central Bank. Apart

from the applicable domestic regulations, Grupo

Financiero Galicia, in its capacity as a listed

company on the markets of the United States

of America, complies with the certification of

its internal controls pursuant to Section 404 of

the Sarbanes Oxley Act (SOX). Corporate risk

management is monitored by the Audit

Committee, which as well gathers and analyzes

the information submitted by the main

controlled companies.


Ensure an effective

business management

control.

Please answer if:

The Management Body

verifies:

II.2.1 Compliance with the

annual budget and business

plan;

X The Board of Directors approves the annual

budget and monitors compliance therewith.

Furthermore, in its capacity as a holding

company, Grupo Financiero Galicia receives the

business plans of the controlled companies and

prepares a consolidated business plan taking

into consideration the goals set, the business

condition and the budgets submitted.

II.2.2 The first-line

managers’ performance and

their compliance with the

goals assigned to them (the

level of intended profits

versus the level of profits

X The Board of Directors strictly complies with

the verification of the implementation of

strategies and policies, and of compliance with

the budget and operations plan, apart from

monitoring, on a monthly basis, the divisions in

all the aspects provided for in the regulations.


achieved, financial rating,

accounting reporting

quality, market share, etc.).

Describe the most

significant aspects of the

Issuer’s Management

Control policy, providing

details of the methods used

and the frequency of the

monitoring carried out by

the Management Body.


Report the Management

Body’s performance

evaluation process and the

related impact.

Please answer if:

II.3.1 Each member of the

Management Body complies

with the Corporate Bylaws

and, as the case may be,

with the Regulations

governing the Management

Body’s operation. Specify

the main guidelines set out

in the Regulations. State

the degree of compliance

with the Corporate Bylaws

and Regulations.

X Grupo Financiero Galicia’s directors strictly

comply with the duties and responsibilities

imposed on them by the Corporate Bylaws. In

addition, all resolutions from the Board of

Directors are adopted pursuant to the Issuer’s

corporate interest.

II.3.2 The Management

Body discloses the results

of its performance

considering the goals set at

the beginning of the period,

so that the shareholders

may assess the degree of

compliance with such

goals, which contemplate

both financial and non-

financial aspects.

Furthermore, the

Management Body submits

a diagnosis about the

degree of compliance with

the policies mentioned in

Recommendation II, points

II.1.1 and II.1.2. Specify

the main aspects covered

by the assessment

conducted by the General

Shareholders' Meeting on

the Management Body’s

X Pursuant to the legal structure of corporations

in Argentina, the Board of Directors can only

explain its performance in order that other

bodies are able to assess it (the Supervisory

Syndics’ Committee or the Oversight

Committee as bodies in charge of supervising

the corporate management, or else the

Shareholders’ Meeting, senior body with power

to decide on the issue). This is such in

Argentine law that the General Corporations

Law expressly prohibits in Section 241 that

directors who are shareholders take part in the

voting regarding their performance and

responsibility. For that reason, Grupo Financiero

Galicia’s Board of Directors provides thorough

explanations in its Annual Report and answers

all the questions asked at the Shareholders'

Meeting, but it refrains from expressing an

opinion on its performance in any form

whatsoever. The assessment is conducted by

shareholders at the Shareholders’ Meeting,

taking as well into consideration the informed

opinion of the Supervisory Syndics’ Committee


compliance with the goals

set and the policies

mentioned in

Recommendation II, points

II.1.1 and II.1.2, mentioning

the date of the

Shareholders’ Meeting

where such assessment

was disclosed.

(Grupo Financiero Galicia does not have an

Oversight Committee).


That the number of external

and independent members

represents a significant

proportion in the Issuer’s

Management Body.

Please answer if:

II.4.1 The proportion of

executive, external and

independent members (the

latter defined by the

regulations of this

Commission) of the

Management Body

corresponds with the

Issuer’s capital structure.

Specify.

X Grupo Financiero Galicia complies with the

appropriate standards regarding total number of

directors, as well as number of independent

directors. Its bylaws provide for the flexibility

necessary to adapt the number of members to

the possible variation of the conditions in which

the company carries out its activities. Generally,

there are between three and nine directors, as

determined by the Shareholders’ Meeting in

each opportunity. The Shareholders' Meeting

can also appoint alternate directors up to a

maximum that shall be equal to the number of

regular directors appointed. In order to

guarantee the continuous performance of its

corporate business, the Board of Directors can

be renewed partially, as long as the number of

candidates proposed is enough so that

shareholders may exercise their cumulative

voting right. The drawing-up of the

corresponding bylaws has been adopted in

recent years, after careful studies had been

carried out for the good performance of the

body.

II.4.2 During the current

year, through a General

Shareholders’ Meeting, the

shareholders agreed on a

policy aimed at having a

proportion of at least 20%

of independent members of

total members of the

Management Body.

Describe the most

significant aspects of such

policy and of any

shareholders’ agreement

that allows understanding

how the members of the

X The policy on the appointment of directors,

both independent and not independent, is the

responsibility of the Shareholders’ Meeting.

Grupo Financiero Galicia’s Board of Directors

does not take part in such decisions as its

members have no decision-making power at the

Shareholders’ Meeting. At Shareholders’

Meetings, the one who proposes the

appointment of candidates for directors (the

same happens with syndics) tells whether

candidates are for one or the other category. At

present, of the eight directors that form the

Board of Directors, five are not independent and

three are independent. With regard to the

independence of the members of the Board of


Management Body are

appointed and during which

term. State whether the

independence of the

members of the

Management Body has been

challenged during the year

and whether there have

been abstentions due to

conflicts of interests.

Directors, no challenges have taken place

during the last year.


Agree on the existence of

standards and procedures

inherent to the selection

and proposal of members of


first-line managers.

Please answer if:

II.5.1 The Issuer has an

Appointment Committee:

----- ----- ------- Grupo Financiero Galicia understands that,

within the framework of the legal structure in

Argentina and market reality, it is not

appropriate to create such a committee with

the duties mentioned in this item. It should be

noted that, unlike other legislations, under

Argentine law the Shareholders’ Meeting has

the exclusive power to appoint directors.

Therefore, the recommendations regarding such

a Committee would not be binding and could be

even abstract.

With regard to the appointment of first-line

managers, the Board of Directors considers it is

not convenient to create an Appointment

Committee due to the reduced size of the

company, as was mentioned before.

II.5.1.1 Made up of at least

three members of the

Management Body, mostly

independent ones;

----- ----- ------- ------------------------------------------

II.5.1.2 Chaired by an

independent member of the

Management Body;

----- ----- ------- ------------------------------------------

II.5.1.3 That has members

who prove to have

adequate skills and

experience in human

resources policies-related

matters;

----- ----- ------- ------------------------------------------

II.5.1.4 That meets at least

twice a year;

----- ----- ------- ------------------------------------------

II.5.1.5 Whose decisions

are not necessarily binding

for the General

Shareholders’ Meeting, but

----- ----- ------- ------------------------------------------


for consultation purposes as

regards the appointment of

the members of the

Management Body.

II.5.2 If there is an

Appointment Committee, it:

----- ----- ------- ------------------------------------------

II.5.2.1. Verifies the annual

review and assessment of

its regulations and suggests

to the Management Body

the modifications necessary

for its approval;

----- ----- ------- ------------------------------------------

II.5.2.2 Suggests the

development of criteria

(skills, experience,

professional and ethical

reputation, among others)

for the appointment of new

members of the

Management Body and

first-line managers;

----- ----- ------- ------------------------------------------

II.5.2.3 Identifies

candidates for members of

the Management Body to

be proposed by the

Committee to the General

Shareholders’ Meeting;

----- ----- ------- ------------------------------------------

II.5.2.4 Suggests members

of the Management Body

that shall take part in the

different committees of the

Management Body pursuant

to their background;

----- ----- ------- ------------------------------------------

II.5.2.5 Recommends that

the Chairman of the Board

of Directors is not also the

Issuer’s Managing Director;

----- ----- ------- ------------------------------------------

II.5.2.6 Ensures the

availability of resumes of

the members of the

Management Body and

first-class managers on the

Issuer's website, where the

duration of the members of


office is specified;

----- ----- ------- ------------------------------------------

II.5.2.7 Verifies the

existence of a succession

plan of the Management

Body and of first-line

managers.

----- ----- ------- ------------------------------------------


II.5.3 If considered

important, include policies

implemented by the Issuer’s

Appointment Committee

that have not been

mentioned in the preceding

point.

----- ----- ------- ------------------------------------------


Assess whether it is

advisable for members of

the Management Body

and/or syndics and/or

members of the Oversight

Committee to perform

duties at several Issuers.

Please answer if:

The Issuer sets a limit for

the members of the

Management Body and/or

syndics and/or members of

the Oversight Committee

with regard to the

performance of duties at

other institutions that do

not belong to the economic

group headed by the Issuer

and/or of which it is a

member. Specify such limit

and describe whether any

violation to such limit took

place during the year.

X The Board of Directors is required to analyze

whether it is convenient that directors and/or

syndics perform duties at other institutions, or

else it is irrelevant. This issue has been

analyzed by Grupo Financiero Galicia

repeatedly. Due to the fact that directors do not

carry out full-time duties, and it is enriching

that they be acquainted with the Board

dynamics in other companies; limiting the

number of institutions where they can be

members of the Board of Directors is not

deemed convenient.


Ensure the training and

development of members of


first-line managers of the

Issuer.

Please answer if:

II.7.1 The Issuer has

ongoing Training Programs

related to the existing

needs of the Issuer for the

members of the

Management Body and

first-line managers, which

include matters about their

roles and responsibilities,

the comprehensive business

risk management, specific

business knowledge and the

related regulations, the

dynamics of corporate

X As regards this item, the Board of Directors

shall establish an ongoing training program for

its members and for the management officers.

Grupo Financiero Galicia, as an exclusively

holding company, does not need to implement

and have such a program as operating

companies do. Notwithstanding the foregoing,

the Board of Directors analyzes the specific

needs on the issue.


governance and corporate

social responsibility

matters. In the case of the

members of the Audit

Committee, international

accounting, auditing and

internal control standards,

as well as specific capital

market regulations.

Describe the programs

carried out during the year

and the degree of

compliance therewith.

II.7.2 The Issuer, through

other means not mentioned

in II.7.1, encourages the

members of the

Management Body and

first-line managers to be

constantly trained so as to

supplement their education

level, thus adding value to

the Issuer. State how this is

done.

------ ------- ------------ The Issuer has no other alternative means to

encourage members of the Board of Directors

and first-line managers to be trained, as it does

not deem it necessary.

PRINCIPLE III. GUARANTEE AN EFFECTIVE POLICY TO IDENTIFY, ASSESS, MANAGE AND

DISCLOSE THE BUSINESS RISK

Recommendation III: The

Management Body shall

have a policy on the

comprehensive business

risk management and

monitors its appropriate

implementation.

Please answer if:

III.1 The Issuer has policies

on comprehensive business

risk (on compliance with

strategic, operating,

financial, accounting

reporting, laws and

regulations goals, among

others). Describe the most


X The Board of Directors fully complies with the

requirement of having updated policies on risk

control and management, in line with the best

practices.

III.2 There is a Risk

Management Committee

inside the Management

Body or General Division.

Report on the existence of

manuals of procedures and

detail the main risk factors

that are specific to the

X The tasks related to risk information and

internal control of each of the controlled

companies are defined and carried out,

rigorously, in each of them. This is particularly

strict in the main controlled company, Banco de

Galicia y Buenos Aires S.A., where the

requirements to be complied with are stringent

as it is a financial institution regulated by the


Issuer or its activity and the

mitigation actions

implemented. If there is not

such a Committee, the risk

management supervision

role performed by the Audit

Committee shall be

described. Also, specify the

degree of interaction

between the Management

Body or its committees and

the Issuer’s General

Division in relation to the

comprehensive business

risk management.

Argentine Central Bank. Corporate risk

management is monitored by the Audit

Committee, which as well gathers and analyzes

the information submitted by the main

controlled companies.

The Audit Committee also supervises the

divisions with regard to all aspects related to

risk management.

III.3 There is an

independent function within

the Issuer’s General

Division that implements

the comprehensive risk

management policies (Risk

Management Officer

function or equivalent one).

Specify.

X Grupo Financiero Galicia’s Managing Director

implements the risk management policies

established by the Board of Directors, under the

supervision of the Audit Committee.

III.4 Comprehensive risk

management policies are

permanently updated

according to authoritative

recommendations and

methodologies in the field.

State which.

X Apart from the applicable domestic regulations,

Grupo Financiero Galicia, in its capacity as a

listed company on the markets of the United

States of America, complies with the

certification of its internal controls pursuant to

Section 404 of the Sarbanes Oxley Act (SOX).

III.5 The Management Body

reports the results of

monitoring the risk

management performed

jointly with the General

Division in the financial

statements and the Annual

Report. Specify the main

aspects of the above

disclosures.

X Grupo Financiero Galicia’s Board of Directors

reports, through a note to its consolidated

financial statements, the tasks carried out to

monitor risk management. The main aspects

dealt with are the following: financial risks,

liquidity, currency risk, interest rate risk, market

risk, cross border risk, transfer risk, exposure to

the non-financial public sector, credit risk,

operational risk, securitization risk,

concentration risk, reputational risk, strategic

risk and risk regarding asset laundering,

terrorism financing and other illegal activities.

PRINCIPLE IV. SAFEGUARD THE INTEGRITY OF FINANCIAL INFORMATION WITH INDEPENDENT

AUDITS

Recommendation IV:

Ensure the independence

and transparency of the

duties the Audit Committee

and the External Auditor are

entrusted with.


Please answer if:

IV.1 The Management

Body, when appointing the

members of the Audit

Committee, considering

that most of them shall be

independent, assesses

whether it is advisable to be

chaired by an independent

member.

X The Audit Committee is formed by three

directors, all of whom are independent

directors. The Committee is chaired by an

independent director.

IV.2 There is an internal

audit function that reports

to the Audit Committee or


Chairperson and that is

responsible for assessing

the internal control system.

State whether the Audit

Committee or the

Management Body annually

assesses the performance

of the internal audit area

and the degree of

independence of its

professional work,

understanding as such that

the professionals in charge

of such function are

independent from the other

operating areas and meet

independence requirements

with respect to the

controlling shareholders or

related entities that have a

material influence on the

Issuer.

Also specify whether the

internal audit function

performs its work in

conformity with the

International Standards for

the Professional Practice of

Internal Auditing issued by

the Institute of Internal

Auditors (IIA).

X The Audit Committee conducts an annual

assessment of the plans and performance of

internal auditors, outsourced from Banco

Galicia, through the analysis of their

Methodology and Annual Work Plan, meetings

and reports issued.

In addition, it assesses the internal controls

currently in force at the Company and its main

subsidiaries, and also it observes the

requirements set forth in Section 404 of the

U.S. Sarbanes-Oxley Act, — and the related

administrative/accounting system — through

the analysis of the reports issued by both

internal and external auditors and the

Supervisory Syndics’ Committee, the analysis

of the Company’s compliance with the

certifications required by Sections 302 and 906

of the U.S. Sarbanes-Oxley Act, performed by

the Company’s Disclosure Committee, as well

as the interviews and clarifications made by the

subsidiaries’ officers.

IV.3 The members of the

Audit Committee annually

assess the suitability,

independence and

performance of the external

Auditors appointed by the

Shareholders' Meeting.

X The Audit Committee carries out an annual

assessment of the independence, work plans

and performance of external auditors, through

the analysis of the different services rendered,

the reports issued, interviews carried out,

correspondence sent and received and reading

of the documentation requested by the


Describe the significant

aspects of the procedures

used to perform the

assessment.

Committee. Additionally, and in compliance

with the provisions set forth in the regulations

in force, the Audit Committee annually files

with the National Securities Commission a

report on the Board of Directors’ proposals for

the appointment of external auditors and the

compensation for directors, for each fiscal year.

IV.4 The Issuer has a policy

on the turnover of the

members of the Supervisory

Committee and/or the

External Auditor, and, in the

case of the latter, if

turnover includes the

external audit form or only

natural persons.

------- ------- ------------- As regards syndics, the conclusion of the

analysis is that such rotation is neither useful

nor convenient, mainly due to the complexity of

businesses to be controlled and the lengthy

period of time it would take a person acting as

syndic for the first time to start to understand

such businesses. In connection with External

Auditors, the following are applicable: Capital

Markets Law, the amended regulations of the

National Securities Commission (Text amended

in 2013), the regulations applicable to external

auditors’ firms of issuing companies registered

in the United States of America (Securities

Exchange Act of 1934, Section 10-A,

Paragraph j. on “Audit Partner Rotation”;

Sarbanes-Oxley Act of 2002, Title II, Section

203. “Audit Partner Rotation”; and the Code of

Federal Regulations, Title 17, Chapter II,

Section 210.2-01, paragraph (c)(6) of the

Securities and Exchange Commission), and the

best practices existing in the area.

Also, as established by General Resolution No.

639/2015 of the National Securities

Commission, the Company’s Extraordinary

Shareholders’ Meeting held on September 8,

2015 approved the extension of the maximum

three-year term in which Price Waterhouse &

Co. S.R.L. will conduct the audit work, in

accordance with the provisions set out in

Section 28 of Chapter III of Title II of the

regulations (Text amended in 2013, as

amended) for fiscal years 2016, 2017 and

2018. Such decision was backed by the Audit

Committee’s favorable opinion, according to the

report issued on August 4, 2015.

PRINCIPLE V. RESPECT THE SHAREHOLaERS’ RIGHTS

Recommendation V.1:

Ensure that the

shareholders have access to

the Issuer’s information.

Please answer if:

X One of the issues related to Grupo Financiero

Galicia S.A.'s policy on the transparency of

information submitted to shareholders is that,

apart from Grupo Financiero Galicia’s managers

and executives, officers from all the companies

that form the holding group, particularly Banco

de Galicia y Buenos Aires, attend the

Shareholders’ Meetings, with the purpose of

answering questions that may be raised by

shareholders.


V.1.1 The Management

Body fosters periodic

informative meetings with

the shareholders, which

take place at the same time

with the presentation of the

interim financial

statements. Specify stating

the number and frequency

of meetings held in the

course of the year.

X Grupo Financiero Galicia presents its financial

statements to the National Securities

Commission, the Buenos Aires Stock Exchange,

the Córdoba Stock Exchange, MAE, Nasdaq

and the U.S. Securities and Exchange

Commission. In addition, financial statements

are published on the Company’s website, where

shareholders may subscribe to the “E-Mail

Alerts” system, which allows them to be

updated through e-mail regarding all

publications of financial statements, documents

and significant events. Informative meetings are

held every time an investor, or a group of

investors, so requires.

V.1.2 The Issuer has

mechanisms for reporting to

investors and a specialized

area to answer inquiries. It

also has a website, which

may be accessed by

shareholders and other

investors and which allows

an access channel for them

to establish contact

between them. Specify.

X Grupo Financiero Galicia has staff in charge of

Investor Relations. This department holds

meetings and carries out conference calls with

shareholders and holders of other securities, in

which a director or senior officer participates.

This department is also available to answer any

questions from shareholders and investors. It is

important to point out that the individuals who

perform this function are in no case authorized

to provide information that may place the

person who requests such information in a

privileged or advantageous position in

comparison to the other shareholders or

investors.

In addition, the company has its own website

(www.gfgsa.com) at the disposal of its

shareholders. This website can be freely

accessed and is permanently updated. This

website is in line with the regulations in force;

and legal, accounting, statutory and regulatory

information required is available for the public.

The website also has a channel for queries.

Recommendation V.2:

Encourage the active

participation of all

shareholders.

Please answer if:

V.2.1 The Management

Body takes measures to

encourage the participation

of all the shareholders at

the General Shareholders’

Meetings. Specify by

differentiating the measures

required by law from those

voluntarily offered by the

Issuer to its shareholders.

X In order to invite shareholders to the General

Shareholders' Meetings, the company makes

publications at the Official Gazette, La Nación

newspaper, the Buenos Aires Stock Exchange,

Mercado Abierto Electrónico (MAE), Cordoba

Stock Exchange, the National Securities

Commission, Nasdaq and the U.S. Securities

and Exchange Commission.

In this regard, it seems it is not necessary to

offer additional incentives aimed at promoting

attendance to Shareholders’ Meetings, because

during recent years attendance has been

approximately 75% of the capital stock,

percentage considered a very significant

participation for a public company.

V.2.2 The General

Shareholders' Meeting has

Regulations to govern its

------- ------- ------- Grupo Financiero Galicia believes the availability

of information for decision-making at

Shareholders’ Meetings, on the part of


operations, which ensure

that the information is

available well in advance for

decision-making. Describe

the main guidelines thereof.

shareholders, is duly regulated by the General

Corporations Law, the Capital Markets Law and

the regulations set forth by the National

Securities Commission.

V.2.3 The mechanisms

implemented by the Issuer

are applicable so that the

minority shareholders

propose matters to be

discussed at the General

Shareholders’ Meeting, in

conformity with the

provisions set out in

effective regulations.

Specify the results.

X Since its creation, Grupo Financiero Galicia has

constantly shown respect for the rights of

shareholders. That is why General

Shareholders’ Meetings are convened and held

in strict compliance with the procedures set

forth by the General Corporations Law, the

Capital Markets Law, the regulations set forth

by the National Securities Commission, the

regulations of the stock exchanges on which its

shares are listed and the Corporate Bylaws. The

procedure for minority shareholders to exercise

their right to include items in the agenda at

Shareholders' Meetings is regulated within such

legal and statutory framework. Furthermore, the

company is controlled by representatives of the

National Securities Commission and the stock

exchanges, which verify whether the call for

Shareholders’ Meetings and the holding thereof

are carried out appropriately.


policies to encourage the

participation of the most

significant shareholders,

such as institutional

investors. Specify.

------- ------- ------- Grupo Financiero Galicia has no policies to

encourage the participation of institutional

shareholders, since it believes they are not

necessary. The percentage of attendance and

participation has been very high during the last

years.

V.2.5 At the Shareholders’

Meetings, where members


are proposed, the following

is informed prior to voting:

(i) each candidate’s position

regarding whether to adopt

or not a Code on Corporate

Governance; and (ii) the

grounds for such position.

------- ------- ------- The Code on Corporate Governance is

discussed and approved by Grupo Financiero

Galicia's Board of Directors, for its inclusion in

the Annual Report for each fiscal year.

Consequently, its members agree with its

contents and ratify such adherence expressly,

through the approval recorded in minutes. To

date, there have not been cases in which a

director of the company adopted a position

different and/or contrary to the adoption of the

Code.

Recommendation V.3:

Ensure the principle of

equity between share and

vote.

Please answer if:

The Issuer has a policy that

promotes the principle of

equity between share and

vote. State how the

composition of outstanding

shares has been changing

during the last three years.

X Grupo Financiero Galicia has a capital stock of

$ 1,300,264,597, divided into two classes of

book-entry shares, Class “A” shares, with a

face value of $ 1 each and entitled to 5 votes

per share, and Class “B” shares, with a face

value of $ 1 each and entitled to 1 vote per

share. In agreement with the regulations set

forth by the Law and by the Bylaws, each class

of shares grants the holders thereof the same

rights.


Recommendation V.4:

Establish mechanisms of

protection for all

shareholders against

takeovers.

Please answer if:

The Issuer adheres to the

system for the mandatory

acquisition of shares in a

public offering. Otherwise,

specify whether there are

other alternative systems,

provided for by the Bylaws,

such as tag along or others.

------- ------- ------- Once Capital Markets Law No. 26831 has

become effective, Grupo Financiero Galicia S.A.

has been comprised in the public offering

system for acquisition and the system of

residual equity interests.

Recommendation V.5:

Increase the percentage of

outstanding shares on

capital.

Please answer if:

The Issuer has a dispersed

share ownership of at least

20% for its ordinary shares.

Otherwise, the Issuer has a

policy for the increase of its

dispersed share ownership

in the market.

State which is the Issuer’s

percentage of dispersed

share ownership as a

percentage of capital stock

and how it has changed

during the last three years.

------- ------- ------- Grupo Financiero Galicia has a capital stock of

$ 1,300,264,597, divided into two classes of

book-entry shares, Class “A” shares, with a

face value of $ 1 each and entitled to 5 votes

per share, and Class “B” shares, with a face

value of $ 1 each and entitled to 1 vote per

share. In agreement with the regulations set

forth by the Law and by the Bylaws, each class

of shares grants the holders thereof the same

rights. The company’s equity structure is made

up of 21.63% Class "A" shares, 43.58% Class

"B" shares and 34.79% ADRs (certificates of

deposit of Class "B” shares). Furthermore,

something worth noting is that Class "B" shares

are authorized to be listed on the Buenos Aires

Stock Exchange, Córdoba Stock Exchange,

Mercado Abierto Electrónico (MAE) and Nasdaq

of the United States of America (through

ADRs).

Recommendation V.6:

Ensure that there is a

transparent policy on

dividends.

Please answer if:

V.6.1 The Issuer has a

policy on the distribution of

dividends provided in the

Corporate Bylaws and

approved by the

Shareholders' Meeting.

Such policy establishes the

conditions to distribute cash

dividends or shares. If there

is such a policy, state the

criteria, frequency and

conditions that shall be met

for the payment of

dividends.

X Grupo Financiero Galicia’s policy for the

distribution of dividends envisages, among

other factors, the obligatory nature of

establishing a legal reserve, the company’s

financial condition and its indebtedness, the

business requirements of affiliated companies,

the regulations they are subject to and, mainly,

that the profits recorded in the financial

statements are, to a great extent, income from

holdings and not realized and liquid profits, a

requirement of Section 68 of the General

Corporations Law so that it is possible to

distribute them as dividends. The proposal to

distribute dividends arising from such analysis

has to be approved at the Shareholders'

Meeting that discusses the Financial

Statements corresponding to each fiscal year.



documented processes to

prepare the proposal for

allocation of the Issuer’s

Unappropriated Retained

Earnings that result in legal,

statutory and voluntary

reserves, carry forwards to

new fiscal year and/or

payment of dividends.

Specify those processes

and detail the Minutes of


Meeting whereby the

distribution of dividends (in

cash or shares) was or was

not approved, if this is not

provided in the Corporate

Bylaws.

X In the Annual Report to the Financial

Statements, Grupo Financiero Galicia’s Board of

Directors informs shareholders about the

balances corresponding to Capital, Capital

Adjustment and Premium for Trading of Shares

in Own Portfolio, and makes a proposal for the

distribution of profits, where the amount

allocated to the distribution of dividends in cash

is indicated.

PRINCIPLE VI. KEEP A DIRECT AND RESPONSIBLE RELATION WITH THE COMMUNITY

Recommendation VI:

Provide the community with

the disclosure of matters

relating to the Issuer and a

channel of direct

communication with the

Company.

Please answer if:

VI.1 The Issuer has an

updated website of public

access, which does not

only furnish material

information of the Company

(Corporate Bylaws, group,

members of the

Management Body,

financial statements,

Annual Report, among

others), but it also gathers

inquiries of users in general.

X As informed in Principle V, Recommendation

1.2, the Company has its own website

(www.gfgsa.com) at the disposal of its

shareholders. This website can be freely

accessed and is permanently updated. This

website is in line with the regulations in force;

and legal, accounting, statutory and regulatory

information is available for the public.

Furthermore, it has a channel of direct

communication with the Company, where any

interested party can raise its concerns, which

are received and dealt with by Grupo Financiero

Galicia.

VI.2 The Issuer issues an

annual Corporate Social

Responsibility Report,

which is verified by an

independent External

Auditor. If any, state the

legal or geographic scope or

coverage thereof and where

it is available. Specify the

standards or initiatives

adopted to carry out its

policy on corporate social

responsibility (Global

Reporting Initiative and/or

the Global United Nations

Compact, ISO 26000,

SA8000, Development

Goals for the Millennium,

SGE 21-Foretica, AA 1000,

------- ------- ------- Grupo Financiero Galicia has a reduced

structure since it is a holding company of a

group, which main asset is the controlling

equity interest in Banco de Galicia, which

currently represents 100% of Banco Galicia’s

capital stock. Consequently, the reports that

account for the Corporate Social and

Environmental Responsibility are prepared by

Banco de Galicia, which has already published

its tenth Sustainability Report, through which

the Bank’s strategy and management are

disclosed, taking into consideration its three

areas: economic, social and environmental

performance.

This report is of great importance for the Bank

since it is a tool that allows the Bank to

document annual performance and

communicate progress and aspects to be

improved and meet the expectations of


Equator Principles, among

others). stakeholders with which the Bank interacts, in a

structured and ongoing manner. The report’s

intention is that readers be able to know the

company’s policies, practices and programs

thanks to a clear reading, with quantitative

information of interest that leaves readers to

reflect on the importance of social players’

responsible contribution to sustainable

development.

Since 2007, internationally widely renowned

guidelines and standards are applied to prepare

this report: The guidelines of the Social Balance

of the IBASE for the systematization of results

with an economic value, the AA1000SES

Accountability standard as a basis for the

dialogue with stakeholders, the ISO 26000

standard on Social Responsibility, the

communication on progress (COP) requirement

with the commitment to the ten principles of

the United Nations Global Compact and the G4

Global Reporting Initiative (GRI) guidelines with

the Sector Supplement for Financial Services. In

regard to this last tool, the Sustainability Report

complies with the “In accordance” criteria and

the Comprehensive option.

The Sustainability Report is audited by PwC

external auditors and checked by the GRI

organization through the “Content Index

Service”. Since 2007, the Bank has adhered to

the Equator Principles and since 2014 and until

December 2015, it forms part of the Executive

Secretariat of the Global Compact Network

Argentina.

PRINCIPLE VII. COMPENSATE FAIRLY AND RESPONSIBLY

Recommendation VII:

Establish clear policies on

the compensation of the

members of the

Management Body and

first-line managers, with

special focus on

establishing conventional or

statutory limitations based

on the existence or

inexistence of profits.

Please answer if:

VII.1 The Issuer has a

Compensation Committee: ----- ----- ----- Grupo Financiero Galicia has no Compensation

Committee, and the Board of Directors

considers it is not convenient to create one due

to the reduced size of the company. Due to its

nature, such a committee is common in big

organizations.

VII.1.1 Made up of at least

three members of the

Management Body, mostly

independent ones;

----- ----- ----- ----------------------------------------

VII.1.2 Chaired by an

independent member of the

Management Body;

----- ----- ----- ----------------------------------------

VII.1.3 That has members ----- ----- ----- ----------------------------------------


who prove to have

adequate skills and

experience in human

resources policies-related

matters;

VII.1.4 That meets at least

twice a year;

----- ----- ---- ----------------------------------------

VII.1.5 Whose decisions are

not necessarily binding for


Meeting or for the

Oversight Committee, but

for consultation purposes as

regards the compensation

of the members of the

Management Body.

----- ----- ----- ----------------------------------------

VII.2 If there is a

Compensation Committee,

it:

----- ----- ----- ----------------------------------------

VII.2.1 Ensures the

existence of a clear relation

between performance of

the key members of staff

and their fixed

compensation and variable

compensation, taking into

consideration the risks

undertaken and the

management thereof;

----- ----- ----- ----------------------------------------

VII.2.2 Controls that the

variable portion of the

compensation of the

members of the

Management Body and

first-line managers is related

to the Issuer’s mid- and

long-term performance;

----- ----- ----- ----------------------------------------

VII.2.3 Reviews the

competitive position of the

Issuer’s policies and

practices regarding

compensation and benefits

of comparable companies,

and suggests changes in

case they are necessary;

----- ----- ----- ----------------------------------------

VII.2.4 Defines and

communicates the policy on

retention, promotion, layoff

and suspension of key

members of staff;

----- ----- ----- ----------------------------------------

VII.2.5 Informs the

guidelines to determine the

retirement plans of

members of the

Management Body and

first-line managers of the

Issuer;

----- ----- ----- ----------------------------------------


VII.2.6 Regularly informs


the Shareholders’ Meeting

about the measures taken

and matters analyzed at its

meetings,

----- ----- ----- ----------------------------------------

VII.2.7 Ensures attendance

of the Chairman of the

Compensation Committee

at the General

Shareholders’ Meeting that

approves compensation to

the Management Body so

that it explains the Issuer’s

policy on compensation to

the members of the

Management Body and

first-line managers.

----- ----- ----- ----------------------------------------

VII.3 If considered

important, include policies

implemented by the Issuer’s

Compensation Committee

that have not been

mentioned in the preceding

point.

----- ----- ----- ----------------------------------------

VII.4 If there is no

Compensation Committee,

explain how the duties

described in VII. 2 are

performed within the

Management Body itself.

----- ----- ----- The Audit Committee expresses its opinion on

whether compensation proposals for Directors

and top officers are reasonable, taking into

consideration market standards.

PRINCIPLE VIII. ENCOURAGE BUSINESS ETHICS

Recommendation VIII:

Ensure ethical behaviors at

the Issuer.

Please answer if:

VIII.1 The Issuer has a

Business Code of Conduct.

State the main guidelines

and whether it is publicly

known. Such Code is

signed by, at least, the

members of the

Management Body and

first-line managers. Indicate

whether its application to

suppliers and customers is

encouraged.

X Grupo Financiero Galicia has a Code of Ethics,

which is signed by the members of the

company, who agree with its contents and

commit to carrying out business with honesty,

responsibility and transparency.

Such Code is public and can be read by

Shareholders and/or any interested party on the

company's website.

VIII.2 The Issuer has

mechanisms to receive any

unlawful or unethical

behavior reporting, either

personally or electronically,

ensuring that the

information furnished is

aligned with the highest

confidentiality and integrity

standards, as well as the

X In Grupo Financiero Galicia’s website

(www.gfgsa.com) there is a “Contact us” link

where stakeholders can fill a form including

their personal information and the reasons for

their inquiries or claims. Such form is

immediately sent to two employees experienced

in dealing with inquiries and/or claims from

investors, for the analysis and solution thereof.

The process for the reception, analysis and

solution of queries or claims is carried out with

http://www.gfgsa.com/


record and conservation of

the information. State

whether the service to

receive and assess

reporting is rendered by the

Issuer’s personnel or by

external and independent

professionals for further

protection of those who

report these events.

the highest confidentiality and integrity

standards that are characteristic of Grupo

Financiero Galicia. Investors can also raise their

concerns in person, at the company’s registered

office. In such a case, investors are received by

employees especially appointed for such

purpose, who try to answer questions

completely and efficiently. In case an immediate

answer is not possible due to the need to

gather information and/or carry out an

investigation, they are requested to state how

they want to be reached in order to receive

information on the result and, in due time, be

sent the answer requested.

VIII.3 The Issuer has

policies, processes and

systems to manage and

solve the reporting

mentioned in point VIII.2.

Make a description of the

most significant aspects

thereof and indicate the

Audit Committee’s degree

of involvement in such

solutions, particularly in

that reporting associated

with internal control

matters for accounting

reporting and as regards the

behaviors of the members


and first-line managers.

X Since its inception and to date, Grupo

Financiero Galicia has not received complaints

or else reporting from investors, whether in

person or through the website. That is why

there are no precedents with regard to the

Audit Committee’s level of involvement in the

solution of conflicts.

With regard to the process implemented by the

company for the management and solution of

the reporting from investors, please refer to

Item VIII.2.

PRINCIPLE IX: BROADEN THE SCOPE OF THE CODE

Recommendation IX:

Foster the inclusion of

provisions related to good

corporate governance

practices in the Corporate

Bylaws.

Please answer if:

The Management Body

assesses whether the

provisions of the Code on

Corporate Governance shall

be reflected, either partially

or completely, in the

Corporate Bylaws, including

the general and specific

responsibilities of the

Management Body. State

which provisions are

actually included in the

Corporate Bylaws since the

creation of the Code to

date.

----- ----- ----- The need to include certain corporate

governance guidelines in the corporate bylaws

can be understood within the framework of

laws that are not as stringent as Argentine laws

with regard to the definition of the Board of

Directors’ duties and responsibilities. In

Argentina, the General Corporations Law, the

Capital Markets Law, the regulations set by the

National Securities Commission and,

additionally, the variety of specific regulations

in other areas of law, provide for a very

complete framework and, therefore, any

addition to the bylaws is unnecessary.

(1) Mark with an X if applicable.

(2) In case of full compliance thereof, please state how the Issuer complies with the principles and recommendations of the

Code on Corporate Governance.

(3) In case of partial compliance or non-compliance, please indicate why and which steps the Issuer's Management Body

plans to take in order to include what it is not adopting in the next fiscal year or future fiscal years, if any.


Eduardo J. Escasany


Autonomous City of Buenos Aires, March 9, 2016


REPORT OF THE SUPERVISORY SYNDICS’ COMMITTEE

To the Directors of


Tte. Gral. Juan D. Perón 430 – Piso 25º

Autonomous City of Buenos Aires

1. In our capacity as members of the Supervisory Syndics’ Committee of Grupo Financiero Galicia

S.A., in accordance with the provisions of Section 294, Subsection 5 of the General Corporations

Law, we have examined the Annual Report, the Inventory and the accompanying Financial

Statements of Grupo Financiero Galicia S.A. (the “Company”) as of December 31, 2015, and the

related Income Statement, Statement of Changes in Shareholders’ Equity and Statement of Cash

Flows for the fiscal year then ended, as well as a summary of significant accounting policies and

other explanatory information disclosed in Notes 1 to 16 and Schedules A, B, C, D, E, G and H,

which supplement them. Furthermore, we have examined the consolidated financial statements of

Grupo Financiero Galicia S.A. and its controlled companies for the fiscal year ended December 31,

2015, with Notes 1 to 39, which are presented as supplementary information.

The amounts and other information for fiscal year 2014 are an integral part of the financial

statements examined mentioned above and, therefore, shall be considered in connection with those

financial statements.

2. As mentioned in Note 1.17, the Company’s Board of Directors is responsible for the preparation

and fair presentation of the accompanying financial statements, in accordance with the accounting

framework established by the Argentine Central Bank (B.C.R.A.) and the requirements set forth by

the National Securities Commission (C.N.V.) to apply those accounting criteria. In addition, the

Board of Directors is responsible for the existence of the internal control they may deem necessary

to enable the preparation of financial statements free from material misstatements resulting from

errors or irregularities.

3. Our responsibility is to express an opinion on the documents mentioned in paragraph 1., based on

the examination conducted with the scope specified in paragraph 4.

4. Our work was conducted in accordance with standards applicable to syndics in Argentina. These

standards require our examination to be performed in accordance with the professional auditing

standards applicable in Argentina and include verifying the consistency of the documents reviewed

with the information concerning corporate decisions, as disclosed in minutes, and the conformity of

those decisions with the law and the bylaws insofar as concerns formal and documental aspects. For

purposes of our professional work, we have reviewed the work performed by the external auditors of

the Company, Price Waterhouse & Co. S.R.L., who issued their unqualified audit report on February

12, 2016. The above-mentioned external auditors conducted their audit in accordance with the

Argentine auditing standards provided in Technical Pronouncement No. 37 of the Argentine

Federation of Professional Councils in Economic Sciences (“F.A.C.P.C.E.”). Our review included

verifying the work plans and the nature, scope and timing of the procedures applied and of the


results of the audit performed by the above-referred professionals. An audit entails applying

procedures to obtain judgmental evidence regarding the amounts and other information disclosed in

the financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risk of material misstatements in the financial statements. When performing such

risk assessment, the auditor should consider the appropriate internal control for the Company’s

preparation and fair presentation of the financial statements in order to design adequate audit

procedures, based on the circumstances, and not for the purpose of expressing an opinion on the

effectiveness of the Company’s internal control. An audit also includes evaluating the adequacy of

the accounting policies applied, the reasonableness of the accounting estimates made by the

Company’s Management and the presentation of the financial statements as a whole.

Given that it is not the responsibility of the Supervisory Syndics’ Committee to exercise any

management control, our examination did not extend to the business criteria and decisions of the

different areas of the Company, as these matters are the exclusive responsibility of the Company’s

Board of Directors.

We also report that, in compliance with the legality control that is part of our field of competence,

during this fiscal year we have applied the other procedures described in Section 294 of Law No.

19550, which we deemed necessary according to the circumstances, including, among others, the

control over the creation and subsistence of the directors’ guarantee.

In relation with the Annual Report, we report containing the information required by Section 66 of

the Corporations Law,and what as concerns our field of competence, the numerical data are

consistent with the accounting records of the Company and other relevant documentation. Forecasts

and projections about future events contained in that documentation are the sole responsibility of

the Board.

We believe that the work we performed provides a reasonable basis for our opinion.

5. In our opinion:

i) the accompanying financial statements fairly present, in all material respects, Grupo Financiero

Galicia S.A.’s financial condition as of December 31, 2015, and the results of its operations, the

changes in shareholders’ equity and the cash flows for the fiscal year then ended, in accordance

with the accounting standards established by the Argentine Central Bank;

ii) the accompanying consolidated financial statements fairly present, in all material respects,

Grupo Financiero Galicia S.A.’s consolidated financial condition with its controlled companies

as of December 31, 2015, and the consolidated results of its operations and the consolidated

cash flows for the fiscal year then ended, in accordance with the accounting standards

established by the Argentine Central Bank.

In compliance with the legality control that is part of our field of competence, we have no

observations to make.

As regards the Annual Report and the report on the code of corporate government corresponding to

the fiscal year ended December 31, 2015, we have no observations to make insofar as concerns our

field of competence, and any assertion on future events is the exclusive responsibility of the

Company’s Board of Directors.

6. Without changing our opinion, as mentioned in Note 1.16, the accompanying financial statements

have been prepared in accordance with the accounting framework established by the Argentine

Central Bank. Such standards differ, in certain aspects, from the professional accounting standards


in force. In such note, the Company has identified and quantified the effect on the financial

statements derived from the different valuation and disclosure criteria, except that the quantification

cannot be made for unfeasibility reasons.

7. Furthermore, we report the following: i) The accompanying financial statements and the corresponding inventory stem from accounting

records kept, in all formal aspects, in compliance with legal regulations prevailing in Argentina.

ii) As called for by Section 21, Part VI, Chapter III, Title II of the regulations of the National

Securities Commission concerning the independence of external auditors as well as the quality

of the auditing policies applied by them and the Company’s accounting policies, the

abovementioned external auditor’s report includes a representation indicating that the auditing

standards in force have been observed, which standards include independence requirements, and

contains no observations relative to the application of the rules issued by the Argentine Central

Bank.

iii) We have applied the procedures on asset laundering and terrorism financing set forth in the

corresponding professional accounting standards issued by the Professional Council in Economic

Sciences of the Autonomous City of Buenos Aires.

iv) We have read the Informative Review, the Additional Information to the Notes to the Financial

Statements required by Section 68 of the Buenos Aires Stock Exchange Regulations and Title

IV, Chapter III, Article 12 of the Regulations of the National Securities Commission, and the

Supplementary and Explanatory Statement by the Board of Directors, required by the Rules

concerning Accounting Documentation of the Córdoba Stock Exchange Regulations, about

which, insofar as concerns our field of competence, we have no significant observations to

make.

Autonomous City of Buenos Aires, March 9, 2016.


Syndic

Supervisory Syndics´Committee


NOTICE OF SHAREHOLDERS´MEETING

All shareholders of Grupo Financiero Galicia S. A. are invited to the Ordinary and Extraordinary Shareholders’ Meeting to be held on April 26th , 2016, at 11:00 AM (first call), at Tte. Gral. Juan D. Perón 430, Basement-Auditorium, Buenos Aires (not the Company’s registered office), with the following AGENDA:

1º Appointment of two shareholders to sign the

minutes.

2º Examination of the business affairs of our

controlled company Banco de Galicia y Buenos

Aires S.A. Position to be adopted by Grupo

Financiero Galicia S.A. over the issues to be dealt

with at Banco de Galicia y Buenos Aires S.A. next

shareholders´ meeting.

3° Examination of the Balance Sheet, Income

Statement, and other documents as set forth by

Section 234, subsection 1 of the Law of

Commercial Companies and the Annual Report

and Report of the Supervisory Syndics’

Committee for the 17th fiscal year ended

December 31st, 2015.

4º Treatment to be given to the fiscal year's

results. Dividends’ distribution.

5º Approval of the Board of Directors and

Supervisory Syndics Committee’s performances.

6º Supervisory Syndics Committee´s

compensation.

7° Board of Directors ´compensation.

8° Granting of authorization to the Board of

Directors to make advance payments of

directors fees during the fiscal year started on

January 1st, 2016 ad-referendum of the

shareholders’ meeting that considers the

documentation corresponding to said fiscal

year.

9º Election of three syndics and three alternate

syndics for one-year term of office.

10° Determination of the number of directors

and alternate directors and, if appropriate,

election thereof for the term established by the

Company’s bylaws until reaching the number of

directors determined by the Shareholders’

meeting.

11° Compensation of the independent

accountant certifying the Financial Statements

for fiscal year 2015.

12º Appointment of the independent

accountant and alternate accountant to certify

the Financial Statements for fiscal year 2016.

13º Delegation of the necessary powers to the

Board of directors and/or sub-delegation to

one or more of its members and/or to one or

more members of the Company´s management

and/or to whom the Board of Directors

designates in order to determine the terms and

conditions of the Global Program for the

issuance of simple, short, mid-and/or long

term Negotiable Obligations, non-convertible

into shares and the Negotiable Obligations that

will be issued under the same Program.

According to current regulations it is necessary

to state that during the fiscal year 2015 there

have been no circumstances to those included

in Section 71 of Law 26,831 (Ley de Mercado

de Capitales).

Notes:

1. Shareholders are hereby notified that

in order to attend the Meeting, they must

deliver a certification evidencing their book-

entry shares, as issued by Caja de Valores

S.A., on or before April 20th, 2016 (from 10:00

a.m. to 4:00 p.m.), at Tte. Gral. Juan D. Perón

430, 25th. Floor, Autonomous City of Buenos

Aires, so that the shares can be registered in

the Meeting’s Attendance Record Book.


2. When considering item 4 of the

agenda, the shareholders´ meeting shall be

treated as extraordinary.

3. Shareholders are hereby reminded that

the National Securities Commission requires

compliance with the procedures set forth in

Chapter II, Title II of its regulations comprised

on (N.T.2013).


ADDITIONAL INFORMATION

Evolution of Shares

Ratings

Comparative Information


EVOLUTION OF SHARES

Fiscal Year 2015 2014 2013

4th Q 3rd Q 2nd Q 1st Q 4th Q 3rd Q 2nd Q 1st Q 4th Q

Market Price

Class B Shares (in Pesos) (1) Buenos Aires Stock Exchange (BASE)

High 43.45 29.60 28.85 31.40 21.40 21.30 16.35 12.35 10.95

Low 23.25 22.00 22.50 17.60 14.90 13.75 12.07 8.30 8.17

Close 36.80 24.85 24.60 27.75 18.50 21.00 14.75 12.10 9.33

ADSs (in Dollars) (2) Nasdaq

High 29.25 22.22 24.10 26.13 16.66 18.50 15.33 12.65 13.05

Low 16.62 15.30 17.84 14.99 10.33 12.18 12.00 7.30 8.86

Close 27.08 17.82 18.79 23.15 15.89 14.21 14.65 12.31 10.45

Trading Volume (in Thousands)

BASE (1) 65,133 45,645 42,031 53,371 57,155 89,653 83,415 65,856 107,176

NASDAQ (2) (3) 347,306 246,303 260,929 305,714 263,745 467,673 397,724 254,305 399,332

Total 412,439 291,948 302,960 359,085 320,900 557,326 481,139 320,161 506,508

Average Shares outstanding (in Thousands)

Primary 1,300,265 1,300,265 1,300,265 1,300,265 1,300,265 1,300,265 1,300,265 1,300,265 1,300,265

Earnings per Share (in Pesos)

Primary 0.957 0.913 0.730 0.737 0.679 0.716 0.533 0.639 0.482

Earnings per ADS (in Pesos)

Primary 9.57 9.13 7.30 7.37 6.79 7.16 5.33 6.39 4.82

(1) Source: Buenos Aires Stock Exchange. Prices: Floor trades at the close of each trading day, 72-hour term.

Volume data correspond to floor trades and trades carried through the “Computer Assisted Integrated Trading System” (Sistema Integrado de

Negociación Asistida por Computadora).

(2) Source: Nasdaq Capital Market. Prices at the close of each trading day.

(3) Expressed in equivalent shares (1 ADS = 10 shares).


LOCAL RATINGS


Shares Ratings

Standard & Poor’s 1

Short-/Medium-Term Debt (1)

Evaluadora Latinoamericana AA-


Institutional Rating

Standard & Poor’s ra BBB

Medium-/Long-Term Debt (1) (2)

Standard & Poor’s ra BBB

Moody’s Baa1.ar

Evaluadora Latinoamericana AA-

Subordinated Debt (1) (3)

Standard & Poor’s ra BB+

Moody’s Ba2.ar

Evaluadora Latinoamericana A+

Deposits

Standard & Poor’s – Long Term ra BBB

Standard & Poor’s – Short Term raA-2

Moody’s – National Currency Baa1.ar

Moody’s – Foreign Currency Ba2.ar

Fiduciary

Moody’s TQ1(-).ar

Tarjeta Naranja S.A.


Fitch Argentina AA- (arg)

Tarjetas Cuyanas S.A.

Long-Term Debt (1) (5)


Compañía Financiera Argentina S.A.

Long-Term Debt (1) (6)



INTERNATIONAL RATINGS


Medium-/Long-Term Debt (1)

Standard & Poor’s (1) (2) B-

Moody’s (1) (2) Caa1

Tarjeta Naranja S.A.


Fitch Argentina CCC

(1) See “Management´s fiscussion and Analysis —Funding and Liabilities”, “febt Securities” table.

(2) Class I Negotiable Obligations with maturity on 2018.

(3) Negotiable Obligations with maturity on 2019.

(4) Class XIII, Class XXIV Series II, Class XXV Series II, Class XXVI Series II, Class XXVII Series II, Class XXVIII Series II y Class XXIX,

Class XXX and Class XXXI Negotiable Obligations.

(5) Class XIV Series II, Class XVI, Class XVIII, Class XIX Series II, Class XX, Class XXI and Class XXII Negotiable Obligations.

(6) Class XV, Class XII Series II, Class XIII and Class XIV Negotiable Obligations.

(7) Class XIII Negotiable Obligations.


CORPORATE INFORMATION

OFFICES


Tte. Gral. Juan D. Perón 430 25° Piso (C1038AAJ), Buenos Aires, Argentina

Telefax: (54 11) 4343-7528

Contact: Investor Relations

Telefax: (54 11) 4343-7528

[email protected]

www.gfgsa.com

LISTING

Grupo Financiero Galicia’s Class “B” ordinary shares are listed on the Buenos Aires Stock

Exchange, the Córdoba Stock Exchange and, under the form of ADRs (American Depositary

Receipts), on the Nasdaq Capital Market of the United States of America, under the ticker symbol

GGAL.

SHAREHOLDERS´ MEETING

The Ordinary and Extraordinary Shareholders’ Meeting to be held on April 26th, 2016, at 11:00

AM (first call), at Tte. Gral. Juan D. Perón 430, Basement-Auditorium, Buenos Aires, Argentina.

REGISTRAR AND TRANSFER AGENT

Caja de Valores S.A.

25 de Mayo 362

(C1002ABH) Buenos Aires, Argentina

Telephone: (54 11) 4317-8900

DEPOSITARY BANK OF ADRS

The Bank of New York Company, Inc.

Shareholders Relations

P.O. Box 11258, Church Street Station

New York, NY 10286-1258

Telephone from the USA: 1-888-BNY-ADRs - (1-888-269-2377)

Telephone from other countries: 1-610-382-7836

e-mail: [email protected]

This constitutes an unofficial English translation of the original Spanish

document. The Spanish document shall govern all respects, including

interpretation matters. For further information please refers to our web page

www.gfgsa.com.

mailto:[email protected]



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